Correlation Between Anglo American and Mind Gym
Can any of the company-specific risk be diversified away by investing in both Anglo American and Mind Gym 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 Mind Gym 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 Mind Gym, you can compare the effects of market volatilities on Anglo American and Mind Gym 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 Mind Gym. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anglo American and Mind Gym.
Diversification Opportunities for Anglo American and Mind Gym
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Anglo and Mind is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Anglo American PLC and Mind Gym in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mind Gym 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 Mind Gym. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mind Gym has no effect on the direction of Anglo American i.e., Anglo American and Mind Gym go up and down completely randomly.
Pair Corralation between Anglo American and Mind Gym
Assuming the 90 days trading horizon Anglo American PLC is expected to generate 0.8 times more return on investment than Mind Gym. However, Anglo American PLC is 1.25 times less risky than Mind Gym. It trades about -0.02 of its potential returns per unit of risk. Mind Gym is currently generating about -0.08 per unit of risk. If you would invest 333,379 in Anglo American PLC on August 26, 2024 and sell it today you would lose (97,479) from holding Anglo American PLC or give up 29.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Anglo American PLC vs. Mind Gym
Performance |
| Timeline |
| Anglo American PLC |
| Mind Gym |
Anglo American and Mind Gym Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anglo American and Mind Gym
The main advantage of trading using opposite Anglo American and Mind Gym positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anglo American position performs unexpectedly, Mind Gym 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 Mind Gym will offset losses from the drop in Mind Gym's long position.| Anglo American vs. Fevertree Drinks Plc | Anglo American vs. Universal Music Group | Anglo American vs. Blackstone Loan Financing | Anglo American vs. Scandinavian Tobacco Group |
| Mind Gym vs. Samsung Electronics Co | Mind Gym vs. Samsung Electronics Co | Mind Gym vs. Hyundai Motor | Mind Gym vs. Toyota Motor Corp |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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