Correlation Between Polymetal International and Anglo American
Can any of the company-specific risk be diversified away by investing in both Polymetal International and Anglo American 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 Polymetal International and Anglo American into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Polymetal International PLC and Anglo American Platinum, you can compare the effects of market volatilities on Polymetal International and Anglo American 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 Polymetal International with a short position of Anglo American. Check out your portfolio center. Please also check ongoing floating volatility patterns of Polymetal International and Anglo American.
Diversification Opportunities for Polymetal International and Anglo American
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Polymetal and Anglo is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Polymetal International PLC and Anglo American Platinum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anglo American Platinum and Polymetal International 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 Polymetal International PLC are associated (or correlated) with Anglo American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anglo American Platinum has no effect on the direction of Polymetal International i.e., Polymetal International and Anglo American go up and down completely randomly.
Pair Corralation between Polymetal International and Anglo American
Assuming the 90 days horizon Polymetal International PLC is expected to under-perform the Anglo American. In addition to that, Polymetal International is 1.08 times more volatile than Anglo American Platinum. It trades about -0.03 of its total potential returns per unit of risk. Anglo American Platinum is currently generating about -0.01 per unit of volatility. If you would invest 8,820 in Anglo American Platinum on August 30, 2024 and sell it today you would lose (5,528) from holding Anglo American Platinum or give up 62.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 42.47% |
| Values | Daily Returns |
Polymetal International PLC vs. Anglo American Platinum
Performance |
| Timeline |
| Polymetal International |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Anglo American Platinum |
Polymetal International and Anglo American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Polymetal International and Anglo American
The main advantage of trading using opposite Polymetal International and Anglo American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Polymetal International position performs unexpectedly, Anglo American 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 Anglo American will offset losses from the drop in Anglo American's long position.| Polymetal International vs. Fresnillo PLC | Polymetal International vs. Summa Silver Corp | Polymetal International vs. GoGold Resources | Polymetal International vs. Scottie Resources Corp |
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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