Correlation Between Anglo Asian and Ithaca Energy
Can any of the company-specific risk be diversified away by investing in both Anglo Asian and Ithaca Energy 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 Ithaca Energy 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 Ithaca Energy PLC, you can compare the effects of market volatilities on Anglo Asian and Ithaca Energy 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 Ithaca Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anglo Asian and Ithaca Energy.
Diversification Opportunities for Anglo Asian and Ithaca Energy
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Anglo and Ithaca is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Anglo Asian Mining and Ithaca Energy PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ithaca Energy 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 Ithaca Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ithaca Energy PLC has no effect on the direction of Anglo Asian i.e., Anglo Asian and Ithaca Energy go up and down completely randomly.
Pair Corralation between Anglo Asian and Ithaca Energy
Assuming the 90 days trading horizon Anglo Asian is expected to generate 2.23 times less return on investment than Ithaca Energy. But when comparing it to its historical volatility, Anglo Asian Mining is 1.03 times less risky than Ithaca Energy. It trades about 0.11 of its potential returns per unit of risk. Ithaca Energy PLC is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 10,840 in Ithaca Energy PLC on October 28, 2024 and sell it today you would earn a total of 1,540 from holding Ithaca Energy PLC or generate 14.21% 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. Ithaca Energy PLC
Performance |
| Timeline |
| Anglo Asian Mining |
| Ithaca Energy PLC |
Anglo Asian and Ithaca Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anglo Asian and Ithaca Energy
The main advantage of trading using opposite Anglo Asian and Ithaca Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anglo Asian position performs unexpectedly, Ithaca Energy 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 Ithaca Energy will offset losses from the drop in Ithaca Energy'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 |
| Ithaca Energy vs. Concurrent Technologies Plc | Ithaca Energy vs. URU Metals | Ithaca Energy vs. Cornish Metals | Ithaca Energy vs. Golden Metal Resources |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |