Correlation Between Anglo American and Vunani
Can any of the company-specific risk be diversified away by investing in both Anglo American and Vunani 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 Vunani 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 Vunani, you can compare the effects of market volatilities on Anglo American and Vunani 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 Vunani. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anglo American and Vunani.
Diversification Opportunities for Anglo American and Vunani
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Anglo and Vunani is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Anglo American Platinum and Vunani in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vunani 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 Vunani. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vunani has no effect on the direction of Anglo American i.e., Anglo American and Vunani go up and down completely randomly.
Pair Corralation between Anglo American and Vunani
Assuming the 90 days trading horizon Anglo American Platinum is expected to generate 1.35 times more return on investment than Vunani. However, Anglo American is 1.35 times more volatile than Vunani. It trades about 0.05 of its potential returns per unit of risk. Vunani is currently generating about -0.1 per unit of risk. If you would invest 5,741,800 in Anglo American Platinum on November 28, 2024 and sell it today you would earn a total of 152,300 from holding Anglo American Platinum or generate 2.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Anglo American Platinum vs. Vunani
Performance |
| Timeline |
| Anglo American Platinum |
| Vunani |
Anglo American and Vunani Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anglo American and Vunani
The main advantage of trading using opposite Anglo American and Vunani positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anglo American position performs unexpectedly, Vunani 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 Vunani will offset losses from the drop in Vunani's long position.| Anglo American vs. Hosken Consolidated Investments | Anglo American vs. E Media Holdings | Anglo American vs. RCL Foods | Anglo American vs. Frontier Transport Holdings |
| Vunani vs. Astoria Investments | Vunani vs. Brimstone Investment | Vunani vs. Ascendis Health | Vunani vs. Astral Foods |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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