Correlation Between Anglo Asian and Pfeiffer Vacuum
Can any of the company-specific risk be diversified away by investing in both Anglo Asian and Pfeiffer Vacuum 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 Pfeiffer Vacuum 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 Pfeiffer Vacuum Technology, you can compare the effects of market volatilities on Anglo Asian and Pfeiffer Vacuum 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 Pfeiffer Vacuum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anglo Asian and Pfeiffer Vacuum.
Diversification Opportunities for Anglo Asian and Pfeiffer Vacuum
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Anglo and Pfeiffer is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Anglo Asian Mining and Pfeiffer Vacuum Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pfeiffer Vacuum Tech 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 Pfeiffer Vacuum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pfeiffer Vacuum Tech has no effect on the direction of Anglo Asian i.e., Anglo Asian and Pfeiffer Vacuum go up and down completely randomly.
Pair Corralation between Anglo Asian and Pfeiffer Vacuum
Assuming the 90 days trading horizon Anglo Asian Mining is expected to generate 8.65 times more return on investment than Pfeiffer Vacuum. However, Anglo Asian is 8.65 times more volatile than Pfeiffer Vacuum Technology. It trades about 0.13 of its potential returns per unit of risk. Pfeiffer Vacuum Technology is currently generating about 0.15 per unit of risk. If you would invest 10,150 in Anglo Asian Mining on November 6, 2024 and sell it today you would earn a total of 750.00 from holding Anglo Asian Mining or generate 7.39% 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. Pfeiffer Vacuum Technology
Performance |
| Timeline |
| Anglo Asian Mining |
| Pfeiffer Vacuum Tech |
Anglo Asian and Pfeiffer Vacuum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anglo Asian and Pfeiffer Vacuum
The main advantage of trading using opposite Anglo Asian and Pfeiffer Vacuum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anglo Asian position performs unexpectedly, Pfeiffer Vacuum 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 Pfeiffer Vacuum will offset losses from the drop in Pfeiffer Vacuum's long position.| Anglo Asian vs. Molson Coors Beverage | Anglo Asian vs. Vulcan Materials Co | Anglo Asian vs. Applied Materials | Anglo Asian vs. Various Eateries PLC |
| Pfeiffer Vacuum vs. Litigation Capital Management | Pfeiffer Vacuum vs. DXC Technology Co | Pfeiffer Vacuum vs. Associated British Foods | Pfeiffer Vacuum vs. United Airlines Holdings |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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