Correlation Between Anglo American and Fonix Mobile
Can any of the company-specific risk be diversified away by investing in both Anglo American and Fonix Mobile 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 American and Fonix Mobile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Anglo American PLC and Fonix Mobile plc, you can compare the effects of market volatilities on Anglo American and Fonix Mobile 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 American with a short position of Fonix Mobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anglo American and Fonix Mobile.
Diversification Opportunities for Anglo American and Fonix Mobile
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Anglo and Fonix is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Anglo American PLC and Fonix Mobile plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fonix Mobile plc and Anglo American 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 American PLC are associated (or correlated) with Fonix Mobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fonix Mobile plc has no effect on the direction of Anglo American i.e., Anglo American and Fonix Mobile go up and down completely randomly.
Pair Corralation between Anglo American and Fonix Mobile
Assuming the 90 days trading horizon Anglo American PLC is expected to under-perform the Fonix Mobile. In addition to that, Anglo American is 1.12 times more volatile than Fonix Mobile plc. It trades about 0.0 of its total potential returns per unit of risk. Fonix Mobile plc is currently generating about 0.02 per unit of volatility. If you would invest 18,979 in Fonix Mobile plc on September 4, 2024 and sell it today you would earn a total of 2,621 from holding Fonix Mobile plc or generate 13.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Anglo American PLC vs. Fonix Mobile plc
Performance |
| Timeline |
| Anglo American PLC |
| Fonix Mobile plc |
Anglo American and Fonix Mobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anglo American and Fonix Mobile
The main advantage of trading using opposite Anglo American and Fonix Mobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anglo American position performs unexpectedly, Fonix Mobile 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 Fonix Mobile will offset losses from the drop in Fonix Mobile's long position.| Anglo American vs. Gamma Communications PLC | Anglo American vs. Wheaton Precious Metals | Anglo American vs. Cornish Metals | Anglo American vs. Cairo Communication SpA |
| Fonix Mobile vs. Cornish Metals | Fonix Mobile vs. Capital Drilling | Fonix Mobile vs. Datalogic | Fonix Mobile vs. Cars Inc |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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