Correlation Between AngloGold Ashanti and Sprott Physical
Can any of the company-specific risk be diversified away by investing in both AngloGold Ashanti and Sprott Physical 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 Sprott Physical 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 Sprott Physical Gold, you can compare the effects of market volatilities on AngloGold Ashanti and Sprott Physical 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 Sprott Physical. Check out your portfolio center. Please also check ongoing floating volatility patterns of AngloGold Ashanti and Sprott Physical.
Diversification Opportunities for AngloGold Ashanti and Sprott Physical
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between AngloGold and Sprott is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding AngloGold Ashanti plc and Sprott Physical Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sprott Physical 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 Sprott Physical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sprott Physical Gold has no effect on the direction of AngloGold Ashanti i.e., AngloGold Ashanti and Sprott Physical go up and down completely randomly.
Pair Corralation between AngloGold Ashanti and Sprott Physical
Allowing for the 90-day total investment horizon AngloGold Ashanti plc is expected to generate 2.34 times more return on investment than Sprott Physical. However, AngloGold Ashanti is 2.34 times more volatile than Sprott Physical Gold. It trades about 0.03 of its potential returns per unit of risk. Sprott Physical Gold is currently generating about 0.05 per unit of risk. If you would invest 1,963 in AngloGold Ashanti plc on September 24, 2024 and sell it today you would earn a total of 427.00 from holding AngloGold Ashanti plc or generate 21.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
AngloGold Ashanti plc vs. Sprott Physical Gold
Performance |
| Timeline |
| AngloGold Ashanti plc |
| Sprott Physical Gold |
AngloGold Ashanti and Sprott Physical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AngloGold Ashanti and Sprott Physical
The main advantage of trading using opposite AngloGold Ashanti and Sprott Physical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AngloGold Ashanti position performs unexpectedly, Sprott Physical 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 Sprott Physical will offset losses from the drop in Sprott Physical's long position.| AngloGold Ashanti vs. Wheaton Precious Metals | AngloGold Ashanti vs. Royal Gold | AngloGold Ashanti vs. Gold Fields Ltd | AngloGold Ashanti vs. SSR Mining |
| Sprott Physical vs. Sprott Physical Silver | Sprott Physical vs. Blue Owl Capital | Sprott Physical vs. Ares Management LP | Sprott Physical vs. Sprott Physical Gold |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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