Correlation Between Anglo American and Sibanye Gold
Can any of the company-specific risk be diversified away by investing in both Anglo American and Sibanye 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 Sibanye 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 Sibanye Gold Ltd, you can compare the effects of market volatilities on Anglo American and Sibanye 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 Sibanye Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anglo American and Sibanye Gold.
Diversification Opportunities for Anglo American and Sibanye Gold
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Anglo and Sibanye is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Anglo American Platinum and Sibanye Gold Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sibanye Gold 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 Sibanye Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sibanye Gold has no effect on the direction of Anglo American i.e., Anglo American and Sibanye Gold go up and down completely randomly.
Pair Corralation between Anglo American and Sibanye Gold
Assuming the 90 days horizon Anglo American Platinum is expected to generate 0.63 times more return on investment than Sibanye Gold. However, Anglo American Platinum is 1.58 times less risky than Sibanye Gold. It trades about 0.1 of its potential returns per unit of risk. Sibanye Gold Ltd is currently generating about -0.02 per unit of risk. If you would invest 539.00 in Anglo American Platinum on October 22, 2024 and sell it today you would earn a total of 18.00 from holding Anglo American Platinum or generate 3.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Anglo American Platinum vs. Sibanye Gold Ltd
Performance |
| Timeline |
| Anglo American Platinum |
| Sibanye Gold |
Anglo American and Sibanye Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anglo American and Sibanye Gold
The main advantage of trading using opposite Anglo American and Sibanye Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anglo American position performs unexpectedly, Sibanye 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 Sibanye Gold will offset losses from the drop in Sibanye Gold'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 |
| Sibanye Gold vs. AngloGold Ashanti plc | Sibanye Gold vs. Harmony Gold Mining | Sibanye Gold vs. Eldorado Gold Corp | Sibanye Gold vs. Kinross Gold |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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