Correlation Between Anglo Asian and Antofagasta PLC
Can any of the company-specific risk be diversified away by investing in both Anglo Asian and Antofagasta PLC 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 Antofagasta PLC 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 Antofagasta PLC, you can compare the effects of market volatilities on Anglo Asian and Antofagasta PLC 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 Antofagasta PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anglo Asian and Antofagasta PLC.
Diversification Opportunities for Anglo Asian and Antofagasta PLC
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Anglo and Antofagasta is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Anglo Asian Mining and Antofagasta PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Antofagasta PLC 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 Antofagasta PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Antofagasta PLC has no effect on the direction of Anglo Asian i.e., Anglo Asian and Antofagasta PLC go up and down completely randomly.
Pair Corralation between Anglo Asian and Antofagasta PLC
Assuming the 90 days trading horizon Anglo Asian Mining is expected to under-perform the Antofagasta PLC. In addition to that, Anglo Asian is 1.26 times more volatile than Antofagasta PLC. It trades about -0.2 of its total potential returns per unit of risk. Antofagasta PLC is currently generating about -0.14 per unit of volatility. If you would invest 179,400 in Antofagasta PLC on August 25, 2024 and sell it today you would lose (12,950) from holding Antofagasta PLC or give up 7.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Anglo Asian Mining vs. Antofagasta PLC
Performance |
| Timeline |
| Anglo Asian Mining |
| Antofagasta PLC |
Anglo Asian and Antofagasta PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anglo Asian and Antofagasta PLC
The main advantage of trading using opposite Anglo Asian and Antofagasta PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anglo Asian position performs unexpectedly, Antofagasta PLC 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 Antofagasta PLC will offset losses from the drop in Antofagasta PLC's long position.| Anglo Asian vs. Givaudan SA | Anglo Asian vs. Antofagasta PLC | Anglo Asian vs. Amaroq Minerals | Anglo Asian vs. Central Asia Metals |
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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