Correlation Between Antofagasta PLC and Synthomer Plc
Can any of the company-specific risk be diversified away by investing in both Antofagasta PLC and Synthomer 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 Synthomer 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 Synthomer plc, you can compare the effects of market volatilities on Antofagasta PLC and Synthomer 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 Synthomer Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Antofagasta PLC and Synthomer Plc.
Diversification Opportunities for Antofagasta PLC and Synthomer Plc
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Antofagasta and Synthomer is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Antofagasta PLC and Synthomer plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Synthomer 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 Synthomer Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Synthomer plc has no effect on the direction of Antofagasta PLC i.e., Antofagasta PLC and Synthomer Plc go up and down completely randomly.
Pair Corralation between Antofagasta PLC and Synthomer Plc
Assuming the 90 days trading horizon Antofagasta PLC is expected to generate 0.55 times more return on investment than Synthomer Plc. However, Antofagasta PLC is 1.82 times less risky than Synthomer Plc. It trades about 0.02 of its potential returns per unit of risk. Synthomer plc is currently generating about -0.07 per unit of risk. If you would invest 143,671 in Antofagasta PLC on August 29, 2024 and sell it today you would earn a total of 22,829 from holding Antofagasta PLC or generate 15.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Antofagasta PLC vs. Synthomer plc
Performance |
| Timeline |
| Antofagasta PLC |
| Synthomer plc |
Antofagasta PLC and Synthomer Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Antofagasta PLC and Synthomer Plc
The main advantage of trading using opposite Antofagasta PLC and Synthomer Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Antofagasta PLC position performs unexpectedly, Synthomer 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 Synthomer Plc will offset losses from the drop in Synthomer Plc's long position.| Antofagasta PLC vs. British American Tobacco | Antofagasta PLC vs. Cairo Communication SpA | Antofagasta PLC vs. Advanced Medical Solutions | Antofagasta PLC vs. Zegona Communications Plc |
| Synthomer Plc vs. Atalaya Mining | Synthomer Plc vs. Anglo Asian Mining | Synthomer Plc vs. Metals Exploration 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Other Complementary Tools
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |