Correlation Between Antofagasta PLC and Golden Metal
Can any of the company-specific risk be diversified away by investing in both Antofagasta PLC and Golden Metal 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 Golden Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Antofagasta PLC and Golden Metal Resources, you can compare the effects of market volatilities on Antofagasta PLC and Golden Metal 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 Golden Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Antofagasta PLC and Golden Metal.
Diversification Opportunities for Antofagasta PLC and Golden Metal
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Antofagasta and Golden is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Antofagasta PLC and Golden Metal Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Metal Resources 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 Golden Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Metal Resources has no effect on the direction of Antofagasta PLC i.e., Antofagasta PLC and Golden Metal go up and down completely randomly.
Pair Corralation between Antofagasta PLC and Golden Metal
Assuming the 90 days trading horizon Antofagasta PLC is expected to generate 6.63 times less return on investment than Golden Metal. But when comparing it to its historical volatility, Antofagasta PLC is 1.97 times less risky than Golden Metal. It trades about 0.03 of its potential returns per unit of risk. Golden Metal Resources is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 838.00 in Golden Metal Resources on September 2, 2024 and sell it today you would earn a total of 2,212 from holding Golden Metal Resources or generate 263.96% 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. Golden Metal Resources
Performance |
| Timeline |
| Antofagasta PLC |
| Golden Metal Resources |
Antofagasta PLC and Golden Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Antofagasta PLC and Golden Metal
The main advantage of trading using opposite Antofagasta PLC and Golden Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Antofagasta PLC position performs unexpectedly, Golden Metal 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 Golden Metal will offset losses from the drop in Golden Metal's 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 |
| Golden Metal vs. Fevertree Drinks Plc | Golden Metal vs. Ion Beam Applications | Golden Metal vs. Fidelity National Information | Golden Metal vs. Batm Advanced Communications |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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