Correlation Between Anglo American and Copper 360
Can any of the company-specific risk be diversified away by investing in both Anglo American and Copper 360 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 Copper 360 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 Copper 360, you can compare the effects of market volatilities on Anglo American and Copper 360 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 Copper 360. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anglo American and Copper 360.
Diversification Opportunities for Anglo American and Copper 360
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Anglo and Copper is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Anglo American Platinum and Copper 360 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Copper 360 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 Copper 360. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Copper 360 has no effect on the direction of Anglo American i.e., Anglo American and Copper 360 go up and down completely randomly.
Pair Corralation between Anglo American and Copper 360
Assuming the 90 days trading horizon Anglo American Platinum is expected to generate 1.02 times more return on investment than Copper 360. However, Anglo American is 1.02 times more volatile than Copper 360. It trades about 0.22 of its potential returns per unit of risk. Copper 360 is currently generating about -0.04 per unit of risk. If you would invest 5,800,000 in Anglo American Platinum on November 3, 2024 and sell it today you would earn a total of 769,700 from holding Anglo American Platinum or generate 13.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Anglo American Platinum vs. Copper 360
Performance |
| Timeline |
| Anglo American Platinum |
| Copper 360 |
Anglo American and Copper 360 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anglo American and Copper 360
The main advantage of trading using opposite Anglo American and Copper 360 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anglo American position performs unexpectedly, Copper 360 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 Copper 360 will offset losses from the drop in Copper 360's long position.| Anglo American vs. Frontier Transport Holdings | Anglo American vs. HomeChoice Investments | Anglo American vs. Life Healthcare | Anglo American vs. Hosken Consolidated Investments |
| Copper 360 vs. Prosus NV | Copper 360 vs. Compagnie Financire Richemont | Copper 360 vs. British American Tobacco | Copper 360 vs. Glencore 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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