Correlation Between AngloGold Ashanti and ASA Gold
Can any of the company-specific risk be diversified away by investing in both AngloGold Ashanti and ASA Gold 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 AngloGold Ashanti and ASA Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AngloGold Ashanti plc and ASA Gold and, you can compare the effects of market volatilities on AngloGold Ashanti and ASA Gold 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 AngloGold Ashanti with a short position of ASA Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of AngloGold Ashanti and ASA Gold.
Diversification Opportunities for AngloGold Ashanti and ASA Gold
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between AngloGold and ASA is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding AngloGold Ashanti plc and ASA Gold and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASA Gold and AngloGold Ashanti 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 AngloGold Ashanti plc are associated (or correlated) with ASA Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASA Gold has no effect on the direction of AngloGold Ashanti i.e., AngloGold Ashanti and ASA Gold go up and down completely randomly.
Pair Corralation between AngloGold Ashanti and ASA Gold
Allowing for the 90-day total investment horizon AngloGold Ashanti plc is expected to generate 1.63 times more return on investment than ASA Gold. However, AngloGold Ashanti is 1.63 times more volatile than ASA Gold and. It trades about 0.05 of its potential returns per unit of risk. ASA Gold and is currently generating about 0.06 per unit of risk. If you would invest 1,904 in AngloGold Ashanti plc on November 2, 2024 and sell it today you would earn a total of 1,117 from holding AngloGold Ashanti plc or generate 58.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
AngloGold Ashanti plc vs. ASA Gold and
Performance |
| Timeline |
| AngloGold Ashanti plc |
| ASA Gold |
AngloGold Ashanti and ASA Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AngloGold Ashanti and ASA Gold
The main advantage of trading using opposite AngloGold Ashanti and ASA Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AngloGold Ashanti position performs unexpectedly, ASA Gold 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 ASA Gold will offset losses from the drop in ASA Gold's long position.| AngloGold Ashanti vs. Harmony Gold Mining | AngloGold Ashanti vs. Eldorado Gold Corp | AngloGold Ashanti vs. Kinross Gold | AngloGold Ashanti vs. Pan American Silver |
| ASA Gold vs. AngloGold Ashanti plc | ASA Gold vs. Sprott Physical Gold | ASA Gold vs. Gold Fields Ltd | ASA Gold vs. Harmony Gold 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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