Correlation Between Antofagasta PLC and AMG Advanced
Can any of the company-specific risk be diversified away by investing in both Antofagasta PLC and AMG Advanced 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 Antofagasta PLC and AMG Advanced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Antofagasta PLC and AMG Advanced Metallurgical, you can compare the effects of market volatilities on Antofagasta PLC and AMG Advanced 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 Antofagasta PLC with a short position of AMG Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Antofagasta PLC and AMG Advanced.
Diversification Opportunities for Antofagasta PLC and AMG Advanced
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Antofagasta and AMG is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Antofagasta PLC and AMG Advanced Metallurgical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMG Advanced Metallu and Antofagasta PLC 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 Antofagasta PLC are associated (or correlated) with AMG Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMG Advanced Metallu has no effect on the direction of Antofagasta PLC i.e., Antofagasta PLC and AMG Advanced go up and down completely randomly.
Pair Corralation between Antofagasta PLC and AMG Advanced
Assuming the 90 days trading horizon Antofagasta PLC is expected to generate 0.73 times more return on investment than AMG Advanced. However, Antofagasta PLC is 1.36 times less risky than AMG Advanced. It trades about 0.17 of its potential returns per unit of risk. AMG Advanced Metallurgical is currently generating about -0.07 per unit of risk. If you would invest 165,650 in Antofagasta PLC on September 12, 2024 and sell it today you would earn a total of 9,600 from holding Antofagasta PLC or generate 5.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Antofagasta PLC vs. AMG Advanced Metallurgical
Performance |
| Timeline |
| Antofagasta PLC |
| AMG Advanced Metallu |
Antofagasta PLC and AMG Advanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Antofagasta PLC and AMG Advanced
The main advantage of trading using opposite Antofagasta PLC and AMG Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Antofagasta PLC position performs unexpectedly, AMG Advanced 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 AMG Advanced will offset losses from the drop in AMG Advanced's long position.| Antofagasta PLC vs. Albion Technology General | Antofagasta PLC vs. Alfa Financial Software | Antofagasta PLC vs. X FAB Silicon Foundries | Antofagasta PLC vs. Cognizant Technology Solutions |
| AMG Advanced vs. Neometals | AMG Advanced vs. Bisichi Mining PLC | AMG Advanced vs. Playtech Plc | AMG Advanced vs. Metals Exploration Plc |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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