Correlation Between Anglo Asian and Anglesey Mining
Can any of the company-specific risk be diversified away by investing in both Anglo Asian and Anglesey 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 Anglesey 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 Anglesey Mining, you can compare the effects of market volatilities on Anglo Asian and Anglesey 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 Anglesey Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anglo Asian and Anglesey Mining.
Diversification Opportunities for Anglo Asian and Anglesey Mining
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Anglo and Anglesey is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Anglo Asian Mining and Anglesey Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anglesey 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 Anglesey Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anglesey Mining has no effect on the direction of Anglo Asian i.e., Anglo Asian and Anglesey Mining go up and down completely randomly.
Pair Corralation between Anglo Asian and Anglesey Mining
Assuming the 90 days trading horizon Anglo Asian Mining is expected to generate 1.18 times more return on investment than Anglesey Mining. However, Anglo Asian is 1.18 times more volatile than Anglesey Mining. It trades about 0.03 of its potential returns per unit of risk. Anglesey Mining is currently generating about -0.02 per unit of risk. If you would invest 9,444 in Anglo Asian Mining on August 31, 2024 and sell it today you would earn a total of 706.00 from holding Anglo Asian Mining or generate 7.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Anglo Asian Mining vs. Anglesey Mining
Performance |
| Timeline |
| Anglo Asian Mining |
| Anglesey Mining |
Anglo Asian and Anglesey Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anglo Asian and Anglesey Mining
The main advantage of trading using opposite Anglo Asian and Anglesey Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anglo Asian position performs unexpectedly, Anglesey 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 Anglesey Mining will offset losses from the drop in Anglesey Mining's long position.| Anglo Asian vs. Automatic Data Processing | Anglo Asian vs. Gear4music Plc | Anglo Asian vs. Grieg Seafood | Anglo Asian vs. Extra Space Storage |
| Anglesey Mining vs. European Metals Holdings | Anglesey Mining vs. Jacquet Metal Service | Anglesey Mining vs. Silvercorp Metals | Anglesey Mining vs. Future Metals NL |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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