Correlation Between Capital Drilling and Antofagasta PLC
Can any of the company-specific risk be diversified away by investing in both Capital Drilling and Antofagasta PLC 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 Capital Drilling and Antofagasta PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capital Drilling and Antofagasta PLC, you can compare the effects of market volatilities on Capital Drilling and Antofagasta PLC 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 Capital Drilling with a short position of Antofagasta PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capital Drilling and Antofagasta PLC.
Diversification Opportunities for Capital Drilling and Antofagasta PLC
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Capital and Antofagasta is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Capital Drilling and Antofagasta PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Antofagasta PLC and Capital Drilling 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 Capital Drilling are associated (or correlated) with Antofagasta PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Antofagasta PLC has no effect on the direction of Capital Drilling i.e., Capital Drilling and Antofagasta PLC go up and down completely randomly.
Pair Corralation between Capital Drilling and Antofagasta PLC
Assuming the 90 days trading horizon Capital Drilling is expected to under-perform the Antofagasta PLC. In addition to that, Capital Drilling is 1.66 times more volatile than Antofagasta PLC. It trades about -0.11 of its total potential returns per unit of risk. Antofagasta PLC is currently generating about 0.17 per unit of volatility. If you would invest 161,400 in Antofagasta PLC on November 3, 2024 and sell it today you would earn a total of 11,100 from holding Antofagasta PLC or generate 6.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capital Drilling vs. Antofagasta PLC
Performance |
| Timeline |
| Capital Drilling |
| Antofagasta PLC |
Capital Drilling and Antofagasta PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capital Drilling and Antofagasta PLC
The main advantage of trading using opposite Capital Drilling and Antofagasta PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capital Drilling position performs unexpectedly, Antofagasta PLC 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 Antofagasta PLC will offset losses from the drop in Antofagasta PLC's long position.| Capital Drilling vs. Samsung Electronics Co | Capital Drilling vs. Wheaton Precious Metals | Capital Drilling vs. STMicroelectronics NV | Capital Drilling vs. Bloomsbury Publishing Plc |
| Antofagasta PLC vs. Pan American Silver | Antofagasta PLC vs. Gamma Communications PLC | Antofagasta PLC vs. First Majestic Silver | Antofagasta PLC vs. Fortuna Silver Mines |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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