Correlation Between Capital Metals and Anglo Eastern
Can any of the company-specific risk be diversified away by investing in both Capital Metals and Anglo Eastern 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 Metals and Anglo Eastern into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capital Metals PLC and Anglo Eastern Plantations PLC, you can compare the effects of market volatilities on Capital Metals and Anglo Eastern 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 Metals with a short position of Anglo Eastern. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capital Metals and Anglo Eastern.
Diversification Opportunities for Capital Metals and Anglo Eastern
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Capital and Anglo is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Capital Metals PLC and Anglo Eastern Plantations PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anglo Eastern Planta and Capital Metals 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 Metals PLC are associated (or correlated) with Anglo Eastern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anglo Eastern Planta has no effect on the direction of Capital Metals i.e., Capital Metals and Anglo Eastern go up and down completely randomly.
Pair Corralation between Capital Metals and Anglo Eastern
Assuming the 90 days trading horizon Capital Metals PLC is expected to generate 2.85 times more return on investment than Anglo Eastern. However, Capital Metals is 2.85 times more volatile than Anglo Eastern Plantations PLC. It trades about 0.02 of its potential returns per unit of risk. Anglo Eastern Plantations PLC is currently generating about -0.01 per unit of risk. If you would invest 185.00 in Capital Metals PLC on September 4, 2024 and sell it today you would earn a total of 0.00 from holding Capital Metals PLC or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capital Metals PLC vs. Anglo Eastern Plantations PLC
Performance |
| Timeline |
| Capital Metals PLC |
| Anglo Eastern Planta |
Capital Metals and Anglo Eastern Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capital Metals and Anglo Eastern
The main advantage of trading using opposite Capital Metals and Anglo Eastern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capital Metals position performs unexpectedly, Anglo Eastern 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 Eastern will offset losses from the drop in Anglo Eastern's long position.| Capital Metals vs. Eco Animal Health | Capital Metals vs. Cairo Communication SpA | Capital Metals vs. Omega Healthcare Investors | Capital Metals vs. Creo Medical Group |
| Anglo Eastern vs. Sligro Food Group | Anglo Eastern vs. Infrastrutture Wireless Italiane | Anglo Eastern vs. Leroy Seafood Group | Anglo Eastern vs. Cornish Metals |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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