Correlation Between Frontier Transport and AngloGold Ashanti
Can any of the company-specific risk be diversified away by investing in both Frontier Transport and AngloGold Ashanti 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 Frontier Transport and AngloGold Ashanti into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Frontier Transport Holdings and AngloGold Ashanti, you can compare the effects of market volatilities on Frontier Transport and AngloGold Ashanti 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 Frontier Transport with a short position of AngloGold Ashanti. Check out your portfolio center. Please also check ongoing floating volatility patterns of Frontier Transport and AngloGold Ashanti.
Diversification Opportunities for Frontier Transport and AngloGold Ashanti
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Frontier and AngloGold is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Frontier Transport Holdings and AngloGold Ashanti in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AngloGold Ashanti and Frontier Transport 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 Frontier Transport Holdings are associated (or correlated) with AngloGold Ashanti. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AngloGold Ashanti has no effect on the direction of Frontier Transport i.e., Frontier Transport and AngloGold Ashanti go up and down completely randomly.
Pair Corralation between Frontier Transport and AngloGold Ashanti
Assuming the 90 days trading horizon Frontier Transport Holdings is expected to generate 1.61 times more return on investment than AngloGold Ashanti. However, Frontier Transport is 1.61 times more volatile than AngloGold Ashanti. It trades about 0.06 of its potential returns per unit of risk. AngloGold Ashanti is currently generating about 0.06 per unit of risk. If you would invest 47,097 in Frontier Transport Holdings on September 2, 2024 and sell it today you would earn a total of 25,903 from holding Frontier Transport Holdings or generate 55.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Frontier Transport Holdings vs. AngloGold Ashanti
Performance |
| Timeline |
| Frontier Transport |
| AngloGold Ashanti |
Frontier Transport and AngloGold Ashanti Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Frontier Transport and AngloGold Ashanti
The main advantage of trading using opposite Frontier Transport and AngloGold Ashanti positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Frontier Transport position performs unexpectedly, AngloGold Ashanti 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 AngloGold Ashanti will offset losses from the drop in AngloGold Ashanti's long position.| Frontier Transport vs. Reinet Investments SCA | Frontier Transport vs. Trematon Capital Investments | Frontier Transport vs. Deneb Investments | Frontier Transport vs. Allied Electronics |
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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