Correlation Between Alkane Resources and AngloGold Ashanti
Can any of the company-specific risk be diversified away by investing in both Alkane Resources and AngloGold Ashanti 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 Alkane Resources and AngloGold Ashanti into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alkane Resources Limited and AngloGold Ashanti plc, you can compare the effects of market volatilities on Alkane Resources and AngloGold Ashanti 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 Alkane Resources with a short position of AngloGold Ashanti. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alkane Resources and AngloGold Ashanti.
Diversification Opportunities for Alkane Resources and AngloGold Ashanti
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Alkane and AngloGold is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Alkane Resources Limited and AngloGold Ashanti plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AngloGold Ashanti plc and Alkane Resources 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 Alkane Resources Limited are associated (or correlated) with AngloGold Ashanti. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AngloGold Ashanti plc has no effect on the direction of Alkane Resources i.e., Alkane Resources and AngloGold Ashanti go up and down completely randomly.
Pair Corralation between Alkane Resources and AngloGold Ashanti
Assuming the 90 days horizon Alkane Resources is expected to generate 1.98 times less return on investment than AngloGold Ashanti. In addition to that, Alkane Resources is 1.86 times more volatile than AngloGold Ashanti plc. It trades about 0.01 of its total potential returns per unit of risk. AngloGold Ashanti plc is currently generating about 0.04 per unit of volatility. If you would invest 1,810 in AngloGold Ashanti plc on September 2, 2024 and sell it today you would earn a total of 684.00 from holding AngloGold Ashanti plc or generate 37.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alkane Resources Limited vs. AngloGold Ashanti plc
Performance |
| Timeline |
| Alkane Resources |
| AngloGold Ashanti plc |
Alkane Resources and AngloGold Ashanti Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alkane Resources and AngloGold Ashanti
The main advantage of trading using opposite Alkane Resources and AngloGold Ashanti positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alkane Resources position performs unexpectedly, AngloGold Ashanti 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 AngloGold Ashanti will offset losses from the drop in AngloGold Ashanti's long position.| Alkane Resources vs. Arafura Resources | Alkane Resources vs. Great Western Minerals | Alkane Resources vs. Greenland Minerals And | Alkane Resources vs. Ucore Rare Metals |
| AngloGold Ashanti vs. Harmony Gold Mining | AngloGold Ashanti vs. Eldorado Gold Corp | AngloGold Ashanti vs. Kinross Gold | AngloGold Ashanti vs. Pan American Silver |
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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