Correlation Between Ferrexpo PLC and Anglesey Mining
Can any of the company-specific risk be diversified away by investing in both Ferrexpo PLC and Anglesey Mining 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 Ferrexpo PLC and Anglesey Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ferrexpo PLC and Anglesey Mining, you can compare the effects of market volatilities on Ferrexpo PLC and Anglesey Mining 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 Ferrexpo PLC with a short position of Anglesey Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ferrexpo PLC and Anglesey Mining.
Diversification Opportunities for Ferrexpo PLC and Anglesey Mining
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Ferrexpo and Anglesey is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Ferrexpo PLC and Anglesey Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anglesey Mining and Ferrexpo 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 Ferrexpo PLC are associated (or correlated) with Anglesey Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anglesey Mining has no effect on the direction of Ferrexpo PLC i.e., Ferrexpo PLC and Anglesey Mining go up and down completely randomly.
Pair Corralation between Ferrexpo PLC and Anglesey Mining
Assuming the 90 days trading horizon Ferrexpo PLC is expected to generate 1.1 times more return on investment than Anglesey Mining. However, Ferrexpo PLC is 1.1 times more volatile than Anglesey Mining. It trades about 0.01 of its potential returns per unit of risk. Anglesey Mining is currently generating about -0.02 per unit of risk. If you would invest 9,375 in Ferrexpo PLC on August 31, 2024 and sell it today you would lose (1,165) from holding Ferrexpo PLC or give up 12.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ferrexpo PLC vs. Anglesey Mining
Performance |
| Timeline |
| Ferrexpo PLC |
| Anglesey Mining |
Ferrexpo PLC and Anglesey Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ferrexpo PLC and Anglesey Mining
The main advantage of trading using opposite Ferrexpo PLC and Anglesey Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ferrexpo PLC position performs unexpectedly, Anglesey Mining 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 Anglesey Mining will offset losses from the drop in Anglesey Mining's long position.The idea behind Ferrexpo PLC and Anglesey Mining pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Anglesey Mining vs. European Metals Holdings | Anglesey Mining vs. Jacquet Metal Service | Anglesey Mining vs. Silvercorp Metals | Anglesey Mining vs. Future Metals NL |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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