Correlation Between Anglo American and American Clean
Can any of the company-specific risk be diversified away by investing in both Anglo American and American Clean 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 American and American Clean into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Anglo American Platinum and American Clean Resources, you can compare the effects of market volatilities on Anglo American and American Clean 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 American with a short position of American Clean. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anglo American and American Clean.
Diversification Opportunities for Anglo American and American Clean
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Anglo and American is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Anglo American Platinum and American Clean Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Clean Resources and Anglo 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 Anglo American Platinum are associated (or correlated) with American Clean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Clean Resources has no effect on the direction of Anglo American i.e., Anglo American and American Clean go up and down completely randomly.
Pair Corralation between Anglo American and American Clean
Assuming the 90 days horizon Anglo American Platinum is expected to under-perform the American Clean. But the pink sheet apears to be less risky and, when comparing its historical volatility, Anglo American Platinum is 1.58 times less risky than American Clean. The pink sheet trades about -0.02 of its potential returns per unit of risk. The American Clean Resources is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 299.00 in American Clean Resources on September 2, 2024 and sell it today you would earn a total of 206.00 from holding American Clean Resources or generate 68.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 65.05% |
| Values | Daily Returns |
Anglo American Platinum vs. American Clean Resources
Performance |
| Timeline |
| Anglo American Platinum |
| American Clean Resources |
Anglo American and American Clean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anglo American and American Clean
The main advantage of trading using opposite Anglo American and American Clean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anglo American position performs unexpectedly, American Clean 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 American Clean will offset losses from the drop in American Clean's long position.| Anglo American vs. Griffon | Anglo American vs. Videolocity International | Anglo American vs. SFL Corporation | Anglo American vs. CECO Environmental Corp |
| American Clean vs. Defiance Silver Corp | American Clean vs. HUMANA INC | American Clean vs. SCOR PK | American Clean vs. Aquagold International |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
Other Complementary Tools
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities |