Correlation Between Interra Copper and Anglo American
Can any of the company-specific risk be diversified away by investing in both Interra Copper and Anglo American 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 Interra Copper and Anglo American into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Interra Copper Corp and Anglo American PLC, you can compare the effects of market volatilities on Interra Copper and Anglo American 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 Interra Copper with a short position of Anglo American. Check out your portfolio center. Please also check ongoing floating volatility patterns of Interra Copper and Anglo American.
Diversification Opportunities for Interra Copper and Anglo American
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Interra and Anglo is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Interra Copper Corp and Anglo American PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anglo American PLC and Interra Copper 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 Interra Copper Corp are associated (or correlated) with Anglo American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anglo American PLC has no effect on the direction of Interra Copper i.e., Interra Copper and Anglo American go up and down completely randomly.
Pair Corralation between Interra Copper and Anglo American
Assuming the 90 days horizon Interra Copper is expected to generate 1.09 times less return on investment than Anglo American. In addition to that, Interra Copper is 5.87 times more volatile than Anglo American PLC. It trades about 0.01 of its total potential returns per unit of risk. Anglo American PLC is currently generating about 0.07 per unit of volatility. If you would invest 1,554 in Anglo American PLC on September 2, 2024 and sell it today you would earn a total of 52.00 from holding Anglo American PLC or generate 3.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Interra Copper Corp vs. Anglo American PLC
Performance |
| Timeline |
| Interra Copper Corp |
| Anglo American PLC |
Interra Copper and Anglo American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Interra Copper and Anglo American
The main advantage of trading using opposite Interra Copper and Anglo American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Interra Copper position performs unexpectedly, Anglo American 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 Anglo American will offset losses from the drop in Anglo American's long position.| Interra Copper vs. Sherritt International | Interra Copper vs. Metals X Limited | Interra Copper vs. Anglo American PLC | Interra Copper vs. ZincX Resources Corp |
| Anglo American vs. South32 Limited | Anglo American vs. NioCorp Developments Ltd | Anglo American vs. HUMANA INC | Anglo American vs. SCOR PK |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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