Correlation Between AngloGold Ashanti and First Trust
Can any of the company-specific risk be diversified away by investing in both AngloGold Ashanti and First 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 First 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 First Trust Exchange Traded, you can compare the effects of market volatilities on AngloGold Ashanti and First 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 First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of AngloGold Ashanti and First Trust.
Diversification Opportunities for AngloGold Ashanti and First Trust
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AngloGold and First is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding AngloGold Ashanti plc and First Trust Exchange Traded in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust Exchange 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 First Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Trust Exchange has no effect on the direction of AngloGold Ashanti i.e., AngloGold Ashanti and First Trust go up and down completely randomly.
Pair Corralation between AngloGold Ashanti and First Trust
Allowing for the 90-day total investment horizon AngloGold Ashanti plc is expected to generate 14.57 times more return on investment than First Trust. However, AngloGold Ashanti is 14.57 times more volatile than First Trust Exchange Traded. It trades about 0.06 of its potential returns per unit of risk. First Trust Exchange Traded is currently generating about 0.24 per unit of risk. If you would invest 1,622 in AngloGold Ashanti plc on November 19, 2024 and sell it today you would earn a total of 1,597 from holding AngloGold Ashanti plc or generate 98.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 33.67% |
| Values | Daily Returns |
AngloGold Ashanti plc vs. First Trust Exchange Traded
Performance |
| Timeline |
| AngloGold Ashanti plc |
| First Trust Exchange |
AngloGold Ashanti and First Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AngloGold Ashanti and First Trust
The main advantage of trading using opposite AngloGold Ashanti and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AngloGold Ashanti position performs unexpectedly, First 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 First Trust will offset losses from the drop in First 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 |
| First Trust vs. Columbia Diversified Fixed | First Trust vs. Doubleline Etf Trust | First Trust vs. Virtus Newfleet ABSMBS | First Trust vs. Vident Core Bond |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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