Correlation Between AngloGold Ashanti and Trematon Capital
Can any of the company-specific risk be diversified away by investing in both AngloGold Ashanti and Trematon Capital 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 AngloGold Ashanti and Trematon Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AngloGold Ashanti and Trematon Capital Investments, you can compare the effects of market volatilities on AngloGold Ashanti and Trematon Capital 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 AngloGold Ashanti with a short position of Trematon Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of AngloGold Ashanti and Trematon Capital.
Diversification Opportunities for AngloGold Ashanti and Trematon Capital
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AngloGold and Trematon is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding AngloGold Ashanti and Trematon Capital Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trematon Capital Inv and AngloGold Ashanti 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 AngloGold Ashanti are associated (or correlated) with Trematon Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trematon Capital Inv has no effect on the direction of AngloGold Ashanti i.e., AngloGold Ashanti and Trematon Capital go up and down completely randomly.
Pair Corralation between AngloGold Ashanti and Trematon Capital
Assuming the 90 days trading horizon AngloGold Ashanti is expected to generate 0.38 times more return on investment than Trematon Capital. However, AngloGold Ashanti is 2.64 times less risky than Trematon Capital. It trades about 0.38 of its potential returns per unit of risk. Trematon Capital Investments is currently generating about -0.1 per unit of risk. If you would invest 4,317,700 in AngloGold Ashanti on October 24, 2024 and sell it today you would earn a total of 862,300 from holding AngloGold Ashanti or generate 19.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
AngloGold Ashanti vs. Trematon Capital Investments
Performance |
| Timeline |
| AngloGold Ashanti |
| Trematon Capital Inv |
AngloGold Ashanti and Trematon Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AngloGold Ashanti and Trematon Capital
The main advantage of trading using opposite AngloGold Ashanti and Trematon Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AngloGold Ashanti position performs unexpectedly, Trematon Capital 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 Trematon Capital will offset losses from the drop in Trematon Capital's long position.| AngloGold Ashanti vs. CA Sales Holdings | AngloGold Ashanti vs. British American Tobacco | AngloGold Ashanti vs. Boxer Retail | AngloGold Ashanti vs. African Media Entertainment |
| Trematon Capital vs. Reinet Investments SCA | Trematon Capital vs. Bytes Technology | Trematon Capital vs. Astral Foods | Trematon Capital vs. Frontier Transport Holdings |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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