Correlation Between Aguila American and Antofagasta PLC
Can any of the company-specific risk be diversified away by investing in both Aguila American and Antofagasta PLC 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 Aguila American and Antofagasta PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aguila American Gold and Antofagasta PLC, you can compare the effects of market volatilities on Aguila American and Antofagasta PLC 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 Aguila American with a short position of Antofagasta PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aguila American and Antofagasta PLC.
Diversification Opportunities for Aguila American and Antofagasta PLC
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aguila and Antofagasta is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Aguila American Gold and Antofagasta PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Antofagasta PLC and Aguila American 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 Aguila American Gold are associated (or correlated) with Antofagasta PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Antofagasta PLC has no effect on the direction of Aguila American i.e., Aguila American and Antofagasta PLC go up and down completely randomly.
Pair Corralation between Aguila American and Antofagasta PLC
Assuming the 90 days horizon Aguila American Gold is expected to generate 3.36 times more return on investment than Antofagasta PLC. However, Aguila American is 3.36 times more volatile than Antofagasta PLC. It trades about 0.05 of its potential returns per unit of risk. Antofagasta PLC is currently generating about 0.03 per unit of risk. If you would invest 22.00 in Aguila American Gold on August 29, 2024 and sell it today you would earn a total of 6.00 from holding Aguila American Gold or generate 27.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 85.68% |
| Values | Daily Returns |
Aguila American Gold vs. Antofagasta PLC
Performance |
| Timeline |
| Aguila American Gold |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
| Antofagasta PLC |
Aguila American and Antofagasta PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aguila American and Antofagasta PLC
The main advantage of trading using opposite Aguila American and Antofagasta PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aguila American position performs unexpectedly, Antofagasta PLC 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 Antofagasta PLC will offset losses from the drop in Antofagasta PLC's long position.| Aguila American vs. Arizona Sonoran Copper | Aguila American vs. Dor Copper Mining | Aguila American vs. CopperCorp Resources | Aguila American vs. Copper Fox Metals |
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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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