Correlation Between Anglo American and Brightrock Gold
Can any of the company-specific risk be diversified away by investing in both Anglo American and Brightrock Gold 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 Brightrock Gold 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 Brightrock Gold Corp, you can compare the effects of market volatilities on Anglo American and Brightrock Gold 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 Brightrock Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anglo American and Brightrock Gold.
Diversification Opportunities for Anglo American and Brightrock Gold
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Anglo and Brightrock is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Anglo American Platinum and Brightrock Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brightrock Gold 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 Brightrock Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brightrock Gold Corp has no effect on the direction of Anglo American i.e., Anglo American and Brightrock Gold go up and down completely randomly.
Pair Corralation between Anglo American and Brightrock Gold
Assuming the 90 days horizon Anglo American Platinum is expected to generate 0.48 times more return on investment than Brightrock Gold. However, Anglo American Platinum is 2.07 times less risky than Brightrock Gold. It trades about -0.02 of its potential returns per unit of risk. Brightrock Gold Corp is currently generating about -0.01 per unit of risk. If you would invest 992.00 in Anglo American Platinum on August 26, 2024 and sell it today you would lose (402.00) from holding Anglo American Platinum or give up 40.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Anglo American Platinum vs. Brightrock Gold Corp
Performance |
| Timeline |
| Anglo American Platinum |
| Brightrock Gold Corp |
Anglo American and Brightrock Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anglo American and Brightrock Gold
The main advantage of trading using opposite Anglo American and Brightrock Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anglo American position performs unexpectedly, Brightrock Gold 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 Brightrock Gold will offset losses from the drop in Brightrock Gold's long position.| Anglo American vs. Morningstar Unconstrained Allocation | Anglo American vs. High Yield Municipal Fund | Anglo American vs. Knife River | Anglo American vs. Klckner Co SE |
| Brightrock Gold vs. Morningstar Unconstrained Allocation | Brightrock Gold vs. High Yield Municipal Fund | Brightrock Gold vs. Knife River | Brightrock Gold vs. Klckner Co SE |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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