Correlation Between Anglo Asian and Leroy Seafood
Can any of the company-specific risk be diversified away by investing in both Anglo Asian and Leroy Seafood 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 Leroy Seafood 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 Leroy Seafood Group, you can compare the effects of market volatilities on Anglo Asian and Leroy Seafood 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 Leroy Seafood. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anglo Asian and Leroy Seafood.
Diversification Opportunities for Anglo Asian and Leroy Seafood
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Anglo and Leroy is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Anglo Asian Mining and Leroy Seafood Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leroy Seafood Group 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 Leroy Seafood. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leroy Seafood Group has no effect on the direction of Anglo Asian i.e., Anglo Asian and Leroy Seafood go up and down completely randomly.
Pair Corralation between Anglo Asian and Leroy Seafood
Assuming the 90 days trading horizon Anglo Asian is expected to generate 1.67 times less return on investment than Leroy Seafood. In addition to that, Anglo Asian is 2.39 times more volatile than Leroy Seafood Group. It trades about 0.11 of its total potential returns per unit of risk. Leroy Seafood Group is currently generating about 0.45 per unit of volatility. If you would invest 4,884 in Leroy Seafood Group on October 28, 2024 and sell it today you would earn a total of 536.00 from holding Leroy Seafood Group or generate 10.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Anglo Asian Mining vs. Leroy Seafood Group
Performance |
| Timeline |
| Anglo Asian Mining |
| Leroy Seafood Group |
Anglo Asian and Leroy Seafood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anglo Asian and Leroy Seafood
The main advantage of trading using opposite Anglo Asian and Leroy Seafood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anglo Asian position performs unexpectedly, Leroy Seafood 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 Leroy Seafood will offset losses from the drop in Leroy Seafood's long position.| Anglo Asian vs. XLMedia PLC | Anglo Asian vs. Medical Properties Trust | Anglo Asian vs. Liberty Media Corp | Anglo Asian vs. Fresenius Medical Care |
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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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