Correlation Between Anglo American and Dis Chem
Can any of the company-specific risk be diversified away by investing in both Anglo American and Dis Chem 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 Dis Chem 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 Dis Chem Pharmacies, you can compare the effects of market volatilities on Anglo American and Dis Chem 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 Dis Chem. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anglo American and Dis Chem.
Diversification Opportunities for Anglo American and Dis Chem
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Anglo and Dis is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Anglo American Platinum and Dis Chem Pharmacies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dis Chem Pharmacies 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 Dis Chem. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dis Chem Pharmacies has no effect on the direction of Anglo American i.e., Anglo American and Dis Chem go up and down completely randomly.
Pair Corralation between Anglo American and Dis Chem
Assuming the 90 days trading horizon Anglo American Platinum is expected to under-perform the Dis Chem. In addition to that, Anglo American is 2.44 times more volatile than Dis Chem Pharmacies. It trades about -0.4 of its total potential returns per unit of risk. Dis Chem Pharmacies is currently generating about 0.06 per unit of volatility. If you would invest 364,334 in Dis Chem Pharmacies on August 28, 2024 and sell it today you would earn a total of 5,166 from holding Dis Chem Pharmacies or generate 1.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Anglo American Platinum vs. Dis Chem Pharmacies
Performance |
| Timeline |
| Anglo American Platinum |
| Dis Chem Pharmacies |
Anglo American and Dis Chem Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anglo American and Dis Chem
The main advantage of trading using opposite Anglo American and Dis Chem positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anglo American position performs unexpectedly, Dis Chem 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 Dis Chem will offset losses from the drop in Dis Chem'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 |
| Dis Chem vs. Centaur Bci Balanced | Dis Chem vs. Sabvest Capital | Dis Chem vs. Growthpoint Properties | Dis Chem vs. Bowler Metcalf |
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.
Other Complementary Tools
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |