Correlation Between ANGLO ASIAN and GMO Internet
Can any of the company-specific risk be diversified away by investing in both ANGLO ASIAN and GMO Internet at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining ANGLO ASIAN and GMO Internet into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ANGLO ASIAN MINING and GMO Internet, you can compare the effects of market volatilities on ANGLO ASIAN and GMO Internet and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in ANGLO ASIAN with a short position of GMO Internet. Check out your portfolio center. Please also check ongoing floating volatility patterns of ANGLO ASIAN and GMO Internet.
Diversification Opportunities for ANGLO ASIAN and GMO Internet
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between ANGLO and GMO is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding ANGLO ASIAN MINING and GMO Internet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GMO Internet and ANGLO ASIAN is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on ANGLO ASIAN MINING are associated (or correlated) with GMO Internet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GMO Internet has no effect on the direction of ANGLO ASIAN i.e., ANGLO ASIAN and GMO Internet go up and down completely randomly.
Pair Corralation between ANGLO ASIAN and GMO Internet
Assuming the 90 days trading horizon ANGLO ASIAN MINING is expected to generate 1.82 times more return on investment than GMO Internet. However, ANGLO ASIAN is 1.82 times more volatile than GMO Internet. It trades about 0.13 of its potential returns per unit of risk. GMO Internet is currently generating about 0.2 per unit of risk. If you would invest 122.00 in ANGLO ASIAN MINING on November 6, 2024 and sell it today you would earn a total of 8.00 from holding ANGLO ASIAN MINING or generate 6.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ANGLO ASIAN MINING vs. GMO Internet
Performance |
| Timeline |
| ANGLO ASIAN MINING |
| GMO Internet |
ANGLO ASIAN and GMO Internet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ANGLO ASIAN and GMO Internet
The main advantage of trading using opposite ANGLO ASIAN and GMO Internet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ANGLO ASIAN position performs unexpectedly, GMO Internet can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in GMO Internet will offset losses from the drop in GMO Internet's long position.| ANGLO ASIAN vs. Air Transport Services | ANGLO ASIAN vs. BROADPEAK SA EO | ANGLO ASIAN vs. Sumitomo Rubber Industries | ANGLO ASIAN vs. Broadridge Financial Solutions |
| GMO Internet vs. Lamar Advertising | GMO Internet vs. PACIFIC ONLINE | GMO Internet vs. CarsalesCom | GMO Internet vs. SALESFORCE INC CDR |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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