Correlation Between Antofagasta PLC and Ariana Resources
Can any of the company-specific risk be diversified away by investing in both Antofagasta PLC and Ariana Resources 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 Ariana Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Antofagasta PLC and Ariana Resources plc, you can compare the effects of market volatilities on Antofagasta PLC and Ariana Resources 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 Ariana Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Antofagasta PLC and Ariana Resources.
Diversification Opportunities for Antofagasta PLC and Ariana Resources
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Antofagasta and Ariana is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Antofagasta PLC and Ariana Resources plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ariana Resources plc 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 Ariana Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ariana Resources plc has no effect on the direction of Antofagasta PLC i.e., Antofagasta PLC and Ariana Resources go up and down completely randomly.
Pair Corralation between Antofagasta PLC and Ariana Resources
Assuming the 90 days trading horizon Antofagasta PLC is expected to generate 0.6 times more return on investment than Ariana Resources. However, Antofagasta PLC is 1.66 times less risky than Ariana Resources. It trades about -0.06 of its potential returns per unit of risk. Ariana Resources plc is currently generating about -0.12 per unit of risk. If you would invest 176,300 in Antofagasta PLC on September 2, 2024 and sell it today you would lose (6,050) from holding Antofagasta PLC or give up 3.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Antofagasta PLC vs. Ariana Resources plc
Performance |
| Timeline |
| Antofagasta PLC |
| Ariana Resources plc |
Antofagasta PLC and Ariana Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Antofagasta PLC and Ariana Resources
The main advantage of trading using opposite Antofagasta PLC and Ariana Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Antofagasta PLC position performs unexpectedly, Ariana Resources 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 Ariana Resources will offset losses from the drop in Ariana Resources' long position.| Antofagasta PLC vs. Bankers Investment Trust | Antofagasta PLC vs. The Mercantile Investment | Antofagasta PLC vs. Herald Investment Trust | Antofagasta PLC vs. Roper Technologies |
| Ariana Resources vs. Givaudan SA | Ariana Resources vs. Antofagasta PLC | Ariana Resources vs. Centamin PLC | Ariana Resources vs. Atalaya Mining |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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