Correlation Between Anglo American and Bowler Metcalf
Can any of the company-specific risk be diversified away by investing in both Anglo American and Bowler Metcalf 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 Bowler Metcalf 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 Bowler Metcalf, you can compare the effects of market volatilities on Anglo American and Bowler Metcalf 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 Bowler Metcalf. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anglo American and Bowler Metcalf.
Diversification Opportunities for Anglo American and Bowler Metcalf
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Anglo and Bowler is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Anglo American Platinum and Bowler Metcalf in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bowler Metcalf 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 Bowler Metcalf. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bowler Metcalf has no effect on the direction of Anglo American i.e., Anglo American and Bowler Metcalf go up and down completely randomly.
Pair Corralation between Anglo American and Bowler Metcalf
Assuming the 90 days trading horizon Anglo American Platinum is expected to under-perform the Bowler Metcalf. In addition to that, Anglo American is 2.13 times more volatile than Bowler Metcalf. It trades about -0.4 of its total potential returns per unit of risk. Bowler Metcalf is currently generating about 0.23 per unit of volatility. If you would invest 127,000 in Bowler Metcalf on August 28, 2024 and sell it today you would earn a total of 8,900 from holding Bowler Metcalf or generate 7.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Anglo American Platinum vs. Bowler Metcalf
Performance |
| Timeline |
| Anglo American Platinum |
| Bowler Metcalf |
Anglo American and Bowler Metcalf Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anglo American and Bowler Metcalf
The main advantage of trading using opposite Anglo American and Bowler Metcalf positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anglo American position performs unexpectedly, Bowler Metcalf 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 Bowler Metcalf will offset losses from the drop in Bowler Metcalf's long position.| Anglo American vs. CA Sales Holdings | Anglo American vs. Life Healthcare | Anglo American vs. Afine Investments | Anglo American vs. E Media Holdings |
| Bowler Metcalf vs. Datatec | Bowler Metcalf vs. Deneb Investments | Bowler Metcalf vs. City Lodge Hotels | Bowler Metcalf vs. Zeder Investments |
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.
Other Complementary Tools
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites |