Correlation Between Antofagasta PLC and Capital Metals
Can any of the company-specific risk be diversified away by investing in both Antofagasta PLC and Capital Metals 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 Capital Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Antofagasta PLC and Capital Metals PLC, you can compare the effects of market volatilities on Antofagasta PLC and Capital Metals 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 Capital Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Antofagasta PLC and Capital Metals.
Diversification Opportunities for Antofagasta PLC and Capital Metals
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Antofagasta and Capital is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Antofagasta PLC and Capital Metals PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital Metals 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 Capital Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital Metals PLC has no effect on the direction of Antofagasta PLC i.e., Antofagasta PLC and Capital Metals go up and down completely randomly.
Pair Corralation between Antofagasta PLC and Capital Metals
Assuming the 90 days trading horizon Antofagasta PLC is expected to under-perform the Capital Metals. But the stock apears to be less risky and, when comparing its historical volatility, Antofagasta PLC is 2.9 times less risky than Capital Metals. The stock trades about -0.2 of its potential returns per unit of risk. The Capital Metals PLC is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 170.00 in Capital Metals PLC on August 30, 2024 and sell it today you would lose (10.00) from holding Capital Metals PLC or give up 5.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 97.73% |
| Values | Daily Returns |
Antofagasta PLC vs. Capital Metals PLC
Performance |
| Timeline |
| Antofagasta PLC |
| Capital Metals PLC |
Antofagasta PLC and Capital Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Antofagasta PLC and Capital Metals
The main advantage of trading using opposite Antofagasta PLC and Capital Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Antofagasta PLC position performs unexpectedly, Capital Metals 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 Capital Metals will offset losses from the drop in Capital Metals' long position.| Antofagasta PLC vs. Vietnam Enterprise Investments | Antofagasta PLC vs. Zoom Video Communications | Antofagasta PLC vs. Aeorema Communications Plc | Antofagasta PLC vs. OneSavings Bank PLC |
| Capital Metals vs. Givaudan SA | Capital Metals vs. Antofagasta PLC | Capital Metals vs. Centamin PLC | Capital Metals 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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