Correlation Between Antofagasta PLC and Aguila American
Can any of the company-specific risk be diversified away by investing in both Antofagasta PLC and Aguila 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 Antofagasta PLC and Aguila American into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Antofagasta PLC and Aguila American Gold, you can compare the effects of market volatilities on Antofagasta PLC and Aguila 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 Antofagasta PLC with a short position of Aguila American. Check out your portfolio center. Please also check ongoing floating volatility patterns of Antofagasta PLC and Aguila American.
Diversification Opportunities for Antofagasta PLC and Aguila American
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Antofagasta and Aguila is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Antofagasta PLC and Aguila American Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aguila American Gold and Antofagasta PLC 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 Antofagasta PLC are associated (or correlated) with Aguila American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aguila American Gold has no effect on the direction of Antofagasta PLC i.e., Antofagasta PLC and Aguila American go up and down completely randomly.
Pair Corralation between Antofagasta PLC and Aguila American
Assuming the 90 days horizon Antofagasta PLC is expected to generate 6.59 times less return on investment than Aguila American. But when comparing it to its historical volatility, Antofagasta PLC is 3.36 times less risky than Aguila American. It trades about 0.03 of its potential returns per unit of risk. Aguila American Gold is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 22.00 in Aguila American Gold on August 29, 2024 and sell it today you would earn a total of 6.00 from holding Aguila American Gold or generate 27.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 85.68% |
| Values | Daily Returns |
Antofagasta PLC vs. Aguila American Gold
Performance |
| Timeline |
| Antofagasta PLC |
| Aguila American Gold |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
Antofagasta PLC and Aguila American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Antofagasta PLC and Aguila American
The main advantage of trading using opposite Antofagasta PLC and Aguila American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Antofagasta PLC position performs unexpectedly, Aguila 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 Aguila American will offset losses from the drop in Aguila American's long position.| Antofagasta PLC vs. Bell Copper | Antofagasta PLC vs. Arizona Sonoran Copper | Antofagasta PLC vs. Dor Copper Mining | Antofagasta PLC vs. CopperCorp Resources |
| Aguila American vs. Arizona Sonoran Copper | Aguila American vs. Dor Copper Mining | Aguila American vs. CopperCorp Resources | Aguila American vs. Copper Fox Metals |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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