Correlation Between Anglo American and Anglo American
Can any of the company-specific risk be diversified away by investing in both Anglo American 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 Anglo American and Anglo American 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 Anglo American Platinum, you can compare the effects of market volatilities on Anglo American 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 Anglo American with a short position of Anglo American. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anglo American and Anglo American.
Diversification Opportunities for Anglo American and Anglo American
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Anglo and Anglo is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Anglo American Platinum and Anglo American Platinum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anglo American Platinum 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 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 Platinum has no effect on the direction of Anglo American i.e., Anglo American and Anglo American go up and down completely randomly.
Pair Corralation between Anglo American and Anglo American
Assuming the 90 days horizon Anglo American Platinum is expected to under-perform the Anglo American. But the pink sheet apears to be less risky and, when comparing its historical volatility, Anglo American Platinum is 1.71 times less risky than Anglo American. The pink sheet trades about -0.04 of its potential returns per unit of risk. The Anglo American Platinum is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 8,820 in Anglo American Platinum on August 30, 2024 and sell it today you would lose (5,528) from holding Anglo American Platinum or give up 62.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 73.74% |
| Values | Daily Returns |
Anglo American Platinum vs. Anglo American Platinum
Performance |
| Timeline |
| Anglo American Platinum |
| Anglo American Platinum |
Anglo American and Anglo American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anglo American and Anglo American
The main advantage of trading using opposite Anglo American and Anglo American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anglo American 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.| Anglo American vs. Southern Silver Exploration | Anglo American vs. Summa Silver Corp | Anglo American vs. GoGold Resources | Anglo American vs. Austral Gold Limited |
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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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