Correlation Between Anglo Asian and Orient Telecoms
Can any of the company-specific risk be diversified away by investing in both Anglo Asian and Orient Telecoms 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 Orient Telecoms 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 Orient Telecoms, you can compare the effects of market volatilities on Anglo Asian and Orient Telecoms 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 Orient Telecoms. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anglo Asian and Orient Telecoms.
Diversification Opportunities for Anglo Asian and Orient Telecoms
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Anglo and Orient is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Anglo Asian Mining and Orient Telecoms in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orient Telecoms 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 Orient Telecoms. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orient Telecoms has no effect on the direction of Anglo Asian i.e., Anglo Asian and Orient Telecoms go up and down completely randomly.
Pair Corralation between Anglo Asian and Orient Telecoms
If you would invest 10,150 in Anglo Asian Mining on November 5, 2024 and sell it today you would earn a total of 750.00 from holding Anglo Asian Mining or generate 7.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Anglo Asian Mining vs. Orient Telecoms
Performance |
| Timeline |
| Anglo Asian Mining |
| Orient Telecoms |
Anglo Asian and Orient Telecoms Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anglo Asian and Orient Telecoms
The main advantage of trading using opposite Anglo Asian and Orient Telecoms positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anglo Asian position performs unexpectedly, Orient Telecoms 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 Orient Telecoms will offset losses from the drop in Orient Telecoms' long position.| Anglo Asian vs. Givaudan SA | Anglo Asian vs. Antofagasta PLC | Anglo Asian vs. Ferrexpo PLC | Anglo Asian vs. Atalaya Mining |
| Orient Telecoms vs. Advanced Medical Solutions | Orient Telecoms vs. Griffin Mining | Orient Telecoms vs. Bisichi Mining PLC | Orient Telecoms vs. Thor Mining PLC |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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