Correlation Between Diversified Energy and Anglo Eastern
Can any of the company-specific risk be diversified away by investing in both Diversified Energy 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 Diversified Energy and Anglo Eastern into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Diversified Energy and Anglo Eastern Plantations PLC, you can compare the effects of market volatilities on Diversified Energy 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 Diversified Energy with a short position of Anglo Eastern. Check out your portfolio center. Please also check ongoing floating volatility patterns of Diversified Energy and Anglo Eastern.
Diversification Opportunities for Diversified Energy and Anglo Eastern
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Diversified and Anglo is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Diversified Energy 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 Diversified Energy 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 Diversified Energy 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 Diversified Energy i.e., Diversified Energy and Anglo Eastern go up and down completely randomly.
Pair Corralation between Diversified Energy and Anglo Eastern
Assuming the 90 days trading horizon Diversified Energy is expected to under-perform the Anglo Eastern. In addition to that, Diversified Energy is 1.65 times more volatile than Anglo Eastern Plantations PLC. It trades about -0.29 of its total potential returns per unit of risk. Anglo Eastern Plantations PLC is currently generating about 0.14 per unit of volatility. If you would invest 63,800 in Anglo Eastern Plantations PLC on November 28, 2024 and sell it today you would earn a total of 3,000 from holding Anglo Eastern Plantations PLC or generate 4.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Diversified Energy vs. Anglo Eastern Plantations PLC
Performance |
| Timeline |
| Diversified Energy |
| Anglo Eastern Planta |
Diversified Energy and Anglo Eastern Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Diversified Energy and Anglo Eastern
The main advantage of trading using opposite Diversified Energy and Anglo Eastern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Diversified Energy 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.| Diversified Energy vs. Axfood AB | Diversified Energy vs. Sartorius Stedim Biotech | Diversified Energy vs. Vitec Software Group | Diversified Energy vs. Grieg Seafood |
| Anglo Eastern vs. Lloyds Banking Group | Anglo Eastern vs. Dolly Varden Silver | Anglo Eastern vs. iShares Physical Silver | Anglo Eastern vs. Endeavour Mining Corp |
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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