Correlation Between AMG Advanced and Anglo American
Can any of the company-specific risk be diversified away by investing in both AMG Advanced and Anglo American 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 AMG Advanced and Anglo American into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AMG Advanced Metallurgical and Anglo American PLC, you can compare the effects of market volatilities on AMG Advanced and Anglo American 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 AMG Advanced with a short position of Anglo American. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMG Advanced and Anglo American.
Diversification Opportunities for AMG Advanced and Anglo American
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between AMG and Anglo is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding AMG Advanced Metallurgical and Anglo American PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anglo American PLC and AMG Advanced 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 AMG Advanced Metallurgical are associated (or correlated) with Anglo American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anglo American PLC has no effect on the direction of AMG Advanced i.e., AMG Advanced and Anglo American go up and down completely randomly.
Pair Corralation between AMG Advanced and Anglo American
Assuming the 90 days horizon AMG Advanced Metallurgical is expected to under-perform the Anglo American. In addition to that, AMG Advanced is 1.29 times more volatile than Anglo American PLC. It trades about -0.06 of its total potential returns per unit of risk. Anglo American PLC is currently generating about 0.04 per unit of volatility. If you would invest 1,258 in Anglo American PLC on September 3, 2024 and sell it today you would earn a total of 348.00 from holding Anglo American PLC or generate 27.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 77.42% |
| Values | Daily Returns |
AMG Advanced Metallurgical vs. Anglo American PLC
Performance |
| Timeline |
| AMG Advanced Metallu |
| Anglo American PLC |
AMG Advanced and Anglo American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMG Advanced and Anglo American
The main advantage of trading using opposite AMG Advanced and Anglo American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMG Advanced position performs unexpectedly, Anglo American 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 Anglo American will offset losses from the drop in Anglo American's long position.| AMG Advanced vs. Qubec Nickel Corp | AMG Advanced vs. IGO Limited | AMG Advanced vs. Avarone Metals | AMG Advanced vs. Adriatic Metals PLC |
| Anglo American vs. BHP Group Limited | Anglo American vs. Avarone Metals | Anglo American vs. Huntsman Exploration | Anglo American vs. Aurelia Metals Limited |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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