Correlation Between AngloGold Ashanti and Mesabi Trust
Can any of the company-specific risk be diversified away by investing in both AngloGold Ashanti and Mesabi Trust 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 Mesabi Trust 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 Mesabi Trust, you can compare the effects of market volatilities on AngloGold Ashanti and Mesabi Trust 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 Mesabi Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of AngloGold Ashanti and Mesabi Trust.
Diversification Opportunities for AngloGold Ashanti and Mesabi Trust
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between AngloGold and Mesabi is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding AngloGold Ashanti plc and Mesabi Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mesabi Trust 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 Mesabi Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mesabi Trust has no effect on the direction of AngloGold Ashanti i.e., AngloGold Ashanti and Mesabi Trust go up and down completely randomly.
Pair Corralation between AngloGold Ashanti and Mesabi Trust
Allowing for the 90-day total investment horizon AngloGold Ashanti is expected to generate 1.09 times less return on investment than Mesabi Trust. In addition to that, AngloGold Ashanti is 1.03 times more volatile than Mesabi Trust. It trades about 0.04 of its total potential returns per unit of risk. Mesabi Trust is currently generating about 0.05 per unit of volatility. If you would invest 1,704 in Mesabi Trust on August 27, 2024 and sell it today you would earn a total of 899.00 from holding Mesabi Trust or generate 52.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AngloGold Ashanti plc vs. Mesabi Trust
Performance |
| Timeline |
| AngloGold Ashanti plc |
| Mesabi Trust |
AngloGold Ashanti and Mesabi Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AngloGold Ashanti and Mesabi Trust
The main advantage of trading using opposite AngloGold Ashanti and Mesabi Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AngloGold Ashanti position performs unexpectedly, Mesabi Trust 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 Mesabi Trust will offset losses from the drop in Mesabi Trust'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 |
| Mesabi Trust vs. Olympic Steel | Mesabi Trust vs. Universal Stainless Alloy | Mesabi Trust vs. POSCO Holdings | Mesabi Trust vs. Outokumpu Oyj ADR |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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