Correlation Between Anglo Asian and Atalaya Mining
Can any of the company-specific risk be diversified away by investing in both Anglo Asian and Atalaya Mining 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 Atalaya Mining 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 Atalaya Mining, you can compare the effects of market volatilities on Anglo Asian and Atalaya Mining 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 Atalaya Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anglo Asian and Atalaya Mining.
Diversification Opportunities for Anglo Asian and Atalaya Mining
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Anglo and Atalaya is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Anglo Asian Mining and Atalaya Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atalaya Mining 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 Atalaya Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atalaya Mining has no effect on the direction of Anglo Asian i.e., Anglo Asian and Atalaya Mining go up and down completely randomly.
Pair Corralation between Anglo Asian and Atalaya Mining
Assuming the 90 days trading horizon Anglo Asian Mining is expected to generate 1.56 times more return on investment than Atalaya Mining. However, Anglo Asian is 1.56 times more volatile than Atalaya Mining. It trades about 0.1 of its potential returns per unit of risk. Atalaya Mining is currently generating about -0.05 per unit of risk. If you would invest 6,450 in Anglo Asian Mining on August 25, 2024 and sell it today you would earn a total of 3,150 from holding Anglo Asian Mining or generate 48.84% 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. Atalaya Mining
Performance |
| Timeline |
| Anglo Asian Mining |
| Atalaya Mining |
Anglo Asian and Atalaya Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anglo Asian and Atalaya Mining
The main advantage of trading using opposite Anglo Asian and Atalaya Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anglo Asian position performs unexpectedly, Atalaya Mining 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 Atalaya Mining will offset losses from the drop in Atalaya Mining's long position.| Anglo Asian vs. Givaudan SA | Anglo Asian vs. Antofagasta PLC | Anglo Asian vs. Amaroq Minerals | Anglo Asian vs. Central Asia Metals |
| Atalaya Mining vs. Givaudan SA | Atalaya Mining vs. Antofagasta PLC | Atalaya Mining vs. Amaroq Minerals | Atalaya Mining vs. Central Asia Metals |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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