Correlation Between Antofagasta Plc and AURUBIS AG
Can any of the company-specific risk be diversified away by investing in both Antofagasta Plc and AURUBIS AG 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 Antofagasta Plc and AURUBIS AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Antofagasta plc and AURUBIS AG UNSPADR, you can compare the effects of market volatilities on Antofagasta Plc and AURUBIS AG 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 Antofagasta Plc with a short position of AURUBIS AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Antofagasta Plc and AURUBIS AG.
Diversification Opportunities for Antofagasta Plc and AURUBIS AG
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Antofagasta and AURUBIS is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Antofagasta plc and AURUBIS AG UNSPADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AURUBIS AG UNSPADR and Antofagasta 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 Antofagasta plc are associated (or correlated) with AURUBIS AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AURUBIS AG UNSPADR has no effect on the direction of Antofagasta Plc i.e., Antofagasta Plc and AURUBIS AG go up and down completely randomly.
Pair Corralation between Antofagasta Plc and AURUBIS AG
Assuming the 90 days horizon Antofagasta plc is expected to generate 0.72 times more return on investment than AURUBIS AG. However, Antofagasta plc is 1.38 times less risky than AURUBIS AG. It trades about 0.03 of its potential returns per unit of risk. AURUBIS AG UNSPADR is currently generating about 0.02 per unit of risk. If you would invest 1,678 in Antofagasta plc on September 14, 2024 and sell it today you would earn a total of 481.00 from holding Antofagasta plc or generate 28.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Antofagasta plc vs. AURUBIS AG UNSPADR
Performance |
| Timeline |
| Antofagasta plc |
| AURUBIS AG UNSPADR |
Antofagasta Plc and AURUBIS AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Antofagasta Plc and AURUBIS AG
The main advantage of trading using opposite Antofagasta Plc and AURUBIS AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Antofagasta Plc position performs unexpectedly, AURUBIS AG 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 AURUBIS AG will offset losses from the drop in AURUBIS AG's long position.| Antofagasta Plc vs. Chunghwa Telecom Co | Antofagasta Plc vs. Charter Communications | Antofagasta Plc vs. Citic Telecom International | Antofagasta Plc vs. Caltagirone SpA |
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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