Correlation Between Anglesey Mining and European Metals
Can any of the company-specific risk be diversified away by investing in both Anglesey Mining and European Metals 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 Anglesey Mining and European Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Anglesey Mining and European Metals Holdings, you can compare the effects of market volatilities on Anglesey Mining and European Metals 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 Anglesey Mining with a short position of European Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anglesey Mining and European Metals.
Diversification Opportunities for Anglesey Mining and European Metals
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Anglesey and European is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Anglesey Mining and European Metals Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on European Metals Holdings and Anglesey Mining 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 Anglesey Mining are associated (or correlated) with European Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of European Metals Holdings has no effect on the direction of Anglesey Mining i.e., Anglesey Mining and European Metals go up and down completely randomly.
Pair Corralation between Anglesey Mining and European Metals
Assuming the 90 days trading horizon Anglesey Mining is expected to generate 1.07 times more return on investment than European Metals. However, Anglesey Mining is 1.07 times more volatile than European Metals Holdings. It trades about -0.03 of its potential returns per unit of risk. European Metals Holdings is currently generating about -0.07 per unit of risk. If you would invest 250.00 in Anglesey Mining on September 3, 2024 and sell it today you would lose (162.00) from holding Anglesey Mining or give up 64.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Anglesey Mining vs. European Metals Holdings
Performance |
| Timeline |
| Anglesey Mining |
| European Metals Holdings |
Anglesey Mining and European Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anglesey Mining and European Metals
The main advantage of trading using opposite Anglesey Mining and European Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anglesey Mining position performs unexpectedly, European Metals 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 European Metals will offset losses from the drop in European Metals' long position.| Anglesey Mining vs. Cincinnati Financial Corp | Anglesey Mining vs. Extra Space Storage | Anglesey Mining vs. Alliance Data Systems | Anglesey Mining vs. Fidelity National Information |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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