Correlation Between Centamin PLC and Anglo Asian
Can any of the company-specific risk be diversified away by investing in both Centamin PLC and Anglo Asian 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 Centamin PLC and Anglo Asian into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Centamin PLC and Anglo Asian Mining, you can compare the effects of market volatilities on Centamin PLC and Anglo Asian 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 Centamin PLC with a short position of Anglo Asian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centamin PLC and Anglo Asian.
Diversification Opportunities for Centamin PLC and Anglo Asian
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Centamin and Anglo is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Centamin PLC and Anglo Asian Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anglo Asian Mining and Centamin PLC 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 Centamin PLC are associated (or correlated) with Anglo Asian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anglo Asian Mining has no effect on the direction of Centamin PLC i.e., Centamin PLC and Anglo Asian go up and down completely randomly.
Pair Corralation between Centamin PLC and Anglo Asian
Assuming the 90 days trading horizon Centamin PLC is expected to generate 0.77 times more return on investment than Anglo Asian. However, Centamin PLC is 1.29 times less risky than Anglo Asian. It trades about -0.28 of its potential returns per unit of risk. Anglo Asian Mining is currently generating about -0.25 per unit of risk. If you would invest 16,790 in Centamin PLC on August 26, 2024 and sell it today you would lose (2,190) from holding Centamin PLC or give up 13.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Centamin PLC vs. Anglo Asian Mining
Performance |
| Timeline |
| Centamin PLC |
| Anglo Asian Mining |
Centamin PLC and Anglo Asian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Centamin PLC and Anglo Asian
The main advantage of trading using opposite Centamin PLC and Anglo Asian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centamin PLC position performs unexpectedly, Anglo Asian 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 Asian will offset losses from the drop in Anglo Asian's long position.| Centamin PLC vs. Givaudan SA | Centamin PLC vs. Antofagasta PLC | Centamin PLC vs. Atalaya Mining | Centamin PLC vs. Ferrexpo PLC |
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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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