Correlation Between ANGANG STEEL and Endeavour Mining
Can any of the company-specific risk be diversified away by investing in both ANGANG STEEL and Endeavour 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 ANGANG STEEL and Endeavour Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ANGANG STEEL H and Endeavour Mining PLC, you can compare the effects of market volatilities on ANGANG STEEL and Endeavour 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 ANGANG STEEL with a short position of Endeavour Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of ANGANG STEEL and Endeavour Mining.
Diversification Opportunities for ANGANG STEEL and Endeavour Mining
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between ANGANG and Endeavour is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding ANGANG STEEL H and Endeavour Mining PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Endeavour Mining PLC and ANGANG STEEL 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 ANGANG STEEL H are associated (or correlated) with Endeavour Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Endeavour Mining PLC has no effect on the direction of ANGANG STEEL i.e., ANGANG STEEL and Endeavour Mining go up and down completely randomly.
Pair Corralation between ANGANG STEEL and Endeavour Mining
Assuming the 90 days trading horizon ANGANG STEEL H is expected to generate 1.45 times more return on investment than Endeavour Mining. However, ANGANG STEEL is 1.45 times more volatile than Endeavour Mining PLC. It trades about 0.04 of its potential returns per unit of risk. Endeavour Mining PLC is currently generating about 0.02 per unit of risk. If you would invest 17.00 in ANGANG STEEL H on December 11, 2024 and sell it today you would earn a total of 6.00 from holding ANGANG STEEL H or generate 35.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ANGANG STEEL H vs. Endeavour Mining PLC
Performance |
| Timeline |
| ANGANG STEEL H |
| Endeavour Mining PLC |
ANGANG STEEL and Endeavour Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ANGANG STEEL and Endeavour Mining
The main advantage of trading using opposite ANGANG STEEL and Endeavour Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ANGANG STEEL position performs unexpectedly, Endeavour 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 Endeavour Mining will offset losses from the drop in Endeavour Mining's long position.| ANGANG STEEL vs. China Eastern Airlines | ||
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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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