Correlation Between Antofagasta PLC and Hardide PLC
Can any of the company-specific risk be diversified away by investing in both Antofagasta PLC and Hardide PLC 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 Hardide PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Antofagasta PLC and Hardide PLC, you can compare the effects of market volatilities on Antofagasta PLC and Hardide PLC 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 Hardide PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Antofagasta PLC and Hardide PLC.
Diversification Opportunities for Antofagasta PLC and Hardide PLC
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Antofagasta and Hardide is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Antofagasta PLC and Hardide PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hardide 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 Hardide PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hardide PLC has no effect on the direction of Antofagasta PLC i.e., Antofagasta PLC and Hardide PLC go up and down completely randomly.
Pair Corralation between Antofagasta PLC and Hardide PLC
Assuming the 90 days trading horizon Antofagasta PLC is expected to generate 0.76 times more return on investment than Hardide PLC. However, Antofagasta PLC is 1.31 times less risky than Hardide PLC. It trades about 0.02 of its potential returns per unit of risk. Hardide PLC is currently generating about -0.07 per unit of risk. If you would invest 144,471 in Antofagasta PLC on August 26, 2024 and sell it today you would earn a total of 21,979 from holding Antofagasta PLC or generate 15.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Antofagasta PLC vs. Hardide PLC
Performance |
| Timeline |
| Antofagasta PLC |
| Hardide PLC |
Antofagasta PLC and Hardide PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Antofagasta PLC and Hardide PLC
The main advantage of trading using opposite Antofagasta PLC and Hardide PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Antofagasta PLC position performs unexpectedly, Hardide PLC 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 Hardide PLC will offset losses from the drop in Hardide PLC's long position.| Antofagasta PLC vs. Optima Health plc | Antofagasta PLC vs. Tatton Asset Management | Antofagasta PLC vs. Direct Line Insurance | Antofagasta PLC vs. Eco Animal Health |
| Hardide PLC vs. Givaudan SA | Hardide PLC vs. Antofagasta PLC | Hardide PLC vs. Centamin PLC | Hardide PLC 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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