Correlation Between ANGLO ASIAN and LVMH Mot
Can any of the company-specific risk be diversified away by investing in both ANGLO ASIAN and LVMH Mot 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 LVMH Mot 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 LVMH Mot Hennessy, you can compare the effects of market volatilities on ANGLO ASIAN and LVMH Mot 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 LVMH Mot. Check out your portfolio center. Please also check ongoing floating volatility patterns of ANGLO ASIAN and LVMH Mot.
Diversification Opportunities for ANGLO ASIAN and LVMH Mot
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between ANGLO and LVMH is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding ANGLO ASIAN MINING and LVMH Mot Hennessy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LVMH Mot Hennessy 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 LVMH Mot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LVMH Mot Hennessy has no effect on the direction of ANGLO ASIAN i.e., ANGLO ASIAN and LVMH Mot go up and down completely randomly.
Pair Corralation between ANGLO ASIAN and LVMH Mot
Assuming the 90 days trading horizon ANGLO ASIAN MINING is expected to generate 1.33 times more return on investment than LVMH Mot. However, ANGLO ASIAN is 1.33 times more volatile than LVMH Mot Hennessy. It trades about 0.19 of its potential returns per unit of risk. LVMH Mot Hennessy is currently generating about 0.04 per unit of risk. If you would invest 124.00 in ANGLO ASIAN MINING on October 15, 2024 and sell it today you would earn a total of 7.00 from holding ANGLO ASIAN MINING or generate 5.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ANGLO ASIAN MINING vs. LVMH Mot Hennessy
Performance |
| Timeline |
| ANGLO ASIAN MINING |
| LVMH Mot Hennessy |
ANGLO ASIAN and LVMH Mot Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ANGLO ASIAN and LVMH Mot
The main advantage of trading using opposite ANGLO ASIAN and LVMH Mot positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ANGLO ASIAN position performs unexpectedly, LVMH Mot 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 LVMH Mot will offset losses from the drop in LVMH Mot's long position.| ANGLO ASIAN vs. Kingdee International Software | ANGLO ASIAN vs. Carnegie Clean Energy | ANGLO ASIAN vs. ULTRA CLEAN HLDGS | ANGLO ASIAN vs. GLG LIFE TECH |
| LVMH Mot vs. MINCO SILVER | LVMH Mot vs. ANGLO ASIAN MINING | LVMH Mot vs. United Natural Foods | LVMH Mot vs. Tyson Foods |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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