Correlation Between Antofagasta PLC and Biome Technologies
Can any of the company-specific risk be diversified away by investing in both Antofagasta PLC and Biome Technologies 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 Biome Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Antofagasta PLC and Biome Technologies Plc, you can compare the effects of market volatilities on Antofagasta PLC and Biome Technologies 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 Biome Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Antofagasta PLC and Biome Technologies.
Diversification Opportunities for Antofagasta PLC and Biome Technologies
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Antofagasta and Biome is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Antofagasta PLC and Biome Technologies Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biome Technologies 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 Biome Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biome Technologies Plc has no effect on the direction of Antofagasta PLC i.e., Antofagasta PLC and Biome Technologies go up and down completely randomly.
Pair Corralation between Antofagasta PLC and Biome Technologies
Assuming the 90 days trading horizon Antofagasta PLC is expected to generate 0.15 times more return on investment than Biome Technologies. However, Antofagasta PLC is 6.47 times less risky than Biome Technologies. It trades about 0.05 of its potential returns per unit of risk. Biome Technologies Plc is currently generating about -0.19 per unit of risk. If you would invest 169,650 in Antofagasta PLC on November 28, 2024 and sell it today you would earn a total of 3,350 from holding Antofagasta PLC or generate 1.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Antofagasta PLC vs. Biome Technologies Plc
Performance |
| Timeline |
| Antofagasta PLC |
| Biome Technologies Plc |
Antofagasta PLC and Biome Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Antofagasta PLC and Biome Technologies
The main advantage of trading using opposite Antofagasta PLC and Biome Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Antofagasta PLC position performs unexpectedly, Biome Technologies 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 Biome Technologies will offset losses from the drop in Biome Technologies' long position.| Antofagasta PLC vs. Eco Animal Health | Antofagasta PLC vs. Resolute Mining Limited | Antofagasta PLC vs. CVS Health Corp | Antofagasta PLC vs. Optima Health plc |
| Biome Technologies vs. MoneysupermarketCom Group PLC | Biome Technologies vs. Primary Health Properties | Biome Technologies vs. PureTech Health plc | Biome Technologies vs. Premier Foods 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like |