Correlation Between Bytes Technology and Anglo American
Can any of the company-specific risk be diversified away by investing in both Bytes Technology 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 Bytes Technology and Anglo American into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bytes Technology and Anglo American Platinum, you can compare the effects of market volatilities on Bytes Technology 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 Bytes Technology with a short position of Anglo American. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bytes Technology and Anglo American.
Diversification Opportunities for Bytes Technology and Anglo American
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Bytes and Anglo is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Bytes Technology 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 Bytes Technology 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 Bytes Technology 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 Bytes Technology i.e., Bytes Technology and Anglo American go up and down completely randomly.
Pair Corralation between Bytes Technology and Anglo American
Assuming the 90 days trading horizon Bytes Technology is expected to under-perform the Anglo American. But the stock apears to be less risky and, when comparing its historical volatility, Bytes Technology is 1.94 times less risky than Anglo American. The stock trades about -0.14 of its potential returns per unit of risk. The Anglo American Platinum is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 6,585,300 in Anglo American Platinum on August 24, 2024 and sell it today you would lose (315,400) from holding Anglo American Platinum or give up 4.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bytes Technology vs. Anglo American Platinum
Performance |
| Timeline |
| Bytes Technology |
| Anglo American Platinum |
Bytes Technology and Anglo American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bytes Technology and Anglo American
The main advantage of trading using opposite Bytes Technology and Anglo American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bytes Technology 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.| Bytes Technology vs. Centaur Bci Balanced | Bytes Technology vs. Growthpoint Properties | Bytes Technology vs. Bowler Metcalf | Bytes Technology vs. Shoprite Holdings |
| Anglo American vs. Ascendis Health | Anglo American vs. HomeChoice Investments | Anglo American vs. Safari Investments RSA | Anglo American vs. Zeder Investments |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |