Correlation Between Anglo American and AbraSilver Resource
Can any of the company-specific risk be diversified away by investing in both Anglo American and AbraSilver Resource 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 AbraSilver Resource 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 AbraSilver Resource Corp, you can compare the effects of market volatilities on Anglo American and AbraSilver Resource 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 AbraSilver Resource. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anglo American and AbraSilver Resource.
Diversification Opportunities for Anglo American and AbraSilver Resource
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Anglo and AbraSilver is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Anglo American Platinum and AbraSilver Resource Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AbraSilver Resource Corp 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 AbraSilver Resource. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AbraSilver Resource Corp has no effect on the direction of Anglo American i.e., Anglo American and AbraSilver Resource go up and down completely randomly.
Pair Corralation between Anglo American and AbraSilver Resource
Assuming the 90 days horizon Anglo American Platinum is expected to under-perform the AbraSilver Resource. But the pink sheet apears to be less risky and, when comparing its historical volatility, Anglo American Platinum is 1.18 times less risky than AbraSilver Resource. The pink sheet trades about -0.03 of its potential returns per unit of risk. The AbraSilver Resource Corp is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 127.00 in AbraSilver Resource Corp on October 21, 2024 and sell it today you would earn a total of 65.00 from holding AbraSilver Resource Corp or generate 51.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Anglo American Platinum vs. AbraSilver Resource Corp
Performance |
| Timeline |
| Anglo American Platinum |
| AbraSilver Resource Corp |
Anglo American and AbraSilver Resource Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anglo American and AbraSilver Resource
The main advantage of trading using opposite Anglo American and AbraSilver Resource positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anglo American position performs unexpectedly, AbraSilver Resource 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 AbraSilver Resource will offset losses from the drop in AbraSilver Resource's long position.| Anglo American vs. Southern Silver Exploration | Anglo American vs. Summa Silver Corp | Anglo American vs. GoGold Resources | Anglo American vs. Austral Gold Limited |
| AbraSilver Resource vs. Defiance Silver Corp | AbraSilver Resource vs. Metallic Minerals Corp | AbraSilver Resource vs. Summa Silver Corp | AbraSilver Resource vs. Honey Badger Silver |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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