Correlation Between First Quantum and Antofagasta PLC
Can any of the company-specific risk be diversified away by investing in both First Quantum 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 First Quantum and Antofagasta PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Quantum Minerals and Antofagasta PLC, you can compare the effects of market volatilities on First Quantum 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 First Quantum with a short position of Antofagasta PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Quantum and Antofagasta PLC.
Diversification Opportunities for First Quantum and Antofagasta PLC
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between First and Antofagasta is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding First Quantum Minerals and Antofagasta PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Antofagasta PLC and First Quantum 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 First Quantum Minerals 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 First Quantum i.e., First Quantum and Antofagasta PLC go up and down completely randomly.
Pair Corralation between First Quantum and Antofagasta PLC
Assuming the 90 days horizon First Quantum Minerals is expected to generate 1.27 times more return on investment than Antofagasta PLC. However, First Quantum is 1.27 times more volatile than Antofagasta PLC. It trades about 0.0 of its potential returns per unit of risk. Antofagasta PLC is currently generating about -0.23 per unit of risk. If you would invest 1,333 in First Quantum Minerals on August 29, 2024 and sell it today you would lose (14.00) from holding First Quantum Minerals or give up 1.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Quantum Minerals vs. Antofagasta PLC
Performance |
| Timeline |
| First Quantum Minerals |
| Antofagasta PLC |
First Quantum and Antofagasta PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Quantum and Antofagasta PLC
The main advantage of trading using opposite First Quantum and Antofagasta PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Quantum 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.| First Quantum vs. Amerigo Resources | First Quantum vs. Antofagasta PLC | First Quantum vs. Capstone Copper Corp | First Quantum vs. Copper Mountain Mining |
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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 CEOs Directory module to screen CEOs from public companies around the world.
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