Correlation Between Anglo Asian and Fulcrum Metals
Can any of the company-specific risk be diversified away by investing in both Anglo Asian and Fulcrum Metals 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 Fulcrum Metals 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 Fulcrum Metals PLC, you can compare the effects of market volatilities on Anglo Asian and Fulcrum Metals 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 Fulcrum Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anglo Asian and Fulcrum Metals.
Diversification Opportunities for Anglo Asian and Fulcrum Metals
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Anglo and Fulcrum is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Anglo Asian Mining and Fulcrum Metals PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fulcrum Metals 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 Fulcrum Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fulcrum Metals PLC has no effect on the direction of Anglo Asian i.e., Anglo Asian and Fulcrum Metals go up and down completely randomly.
Pair Corralation between Anglo Asian and Fulcrum Metals
Assuming the 90 days trading horizon Anglo Asian Mining is expected to generate 4.51 times more return on investment than Fulcrum Metals. However, Anglo Asian is 4.51 times more volatile than Fulcrum Metals PLC. It trades about 0.07 of its potential returns per unit of risk. Fulcrum Metals PLC is currently generating about 0.22 per unit of risk. If you would invest 10,850 in Anglo Asian Mining on November 27, 2024 and sell it today you would earn a total of 400.00 from holding Anglo Asian Mining or generate 3.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Anglo Asian Mining vs. Fulcrum Metals PLC
Performance |
| Timeline |
| Anglo Asian Mining |
| Fulcrum Metals PLC |
Anglo Asian and Fulcrum Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anglo Asian and Fulcrum Metals
The main advantage of trading using opposite Anglo Asian and Fulcrum Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anglo Asian position performs unexpectedly, Fulcrum Metals 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 Fulcrum Metals will offset losses from the drop in Fulcrum Metals' long position.| Anglo Asian vs. EJF Investments | Anglo Asian vs. Aurora Investment Trust | Anglo Asian vs. Edinburgh Investment Trust | Anglo Asian vs. Geely Automobile Holdings |
| Fulcrum Metals vs. CNH Industrial NV | Fulcrum Metals vs. Resolute Mining Limited | Fulcrum Metals vs. URU Metals | Fulcrum Metals vs. Melia Hotels |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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