Correlation Between Anglo American and First Tellurium
Can any of the company-specific risk be diversified away by investing in both Anglo American and First Tellurium 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 First Tellurium 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 First Tellurium Corp, you can compare the effects of market volatilities on Anglo American and First Tellurium 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 First Tellurium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anglo American and First Tellurium.
Diversification Opportunities for Anglo American and First Tellurium
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Anglo and First is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Anglo American Platinum and First Tellurium Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Tellurium 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 First Tellurium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Tellurium Corp has no effect on the direction of Anglo American i.e., Anglo American and First Tellurium go up and down completely randomly.
Pair Corralation between Anglo American and First Tellurium
Assuming the 90 days horizon Anglo American Platinum is expected to under-perform the First Tellurium. But the pink sheet apears to be less risky and, when comparing its historical volatility, Anglo American Platinum is 2.02 times less risky than First Tellurium. The pink sheet trades about -0.03 of its potential returns per unit of risk. The First Tellurium Corp is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 9.41 in First Tellurium Corp on September 3, 2024 and sell it today you would earn a total of 0.59 from holding First Tellurium Corp or generate 6.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Anglo American Platinum vs. First Tellurium Corp
Performance |
| Timeline |
| Anglo American Platinum |
| First Tellurium Corp |
Anglo American and First Tellurium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anglo American and First Tellurium
The main advantage of trading using opposite Anglo American and First Tellurium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anglo American position performs unexpectedly, First Tellurium 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 First Tellurium will offset losses from the drop in First Tellurium'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 |
| First Tellurium vs. Star Royalties | First Tellurium vs. Defiance Silver Corp | First Tellurium vs. Diamond Fields Resources | First Tellurium vs. GoGold Resources |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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