Correlation Between Impala Platinum and Anglo American
Can any of the company-specific risk be diversified away by investing in both Impala Platinum 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 Impala Platinum and Anglo American into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Impala Platinum Holdings and Anglo American Platinum, you can compare the effects of market volatilities on Impala Platinum 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 Impala Platinum with a short position of Anglo American. Check out your portfolio center. Please also check ongoing floating volatility patterns of Impala Platinum and Anglo American.
Diversification Opportunities for Impala Platinum and Anglo American
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Impala and Anglo is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Impala Platinum Holdings and Anglo American Platinum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anglo American Platinum and Impala Platinum 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 Impala Platinum Holdings 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 Platinum has no effect on the direction of Impala Platinum i.e., Impala Platinum and Anglo American go up and down completely randomly.
Pair Corralation between Impala Platinum and Anglo American
Assuming the 90 days horizon Impala Platinum Holdings is expected to generate 0.96 times more return on investment than Anglo American. However, Impala Platinum Holdings is 1.04 times less risky than Anglo American. It trades about 0.04 of its potential returns per unit of risk. Anglo American Platinum is currently generating about -0.02 per unit of risk. If you would invest 611.00 in Impala Platinum Holdings on August 24, 2024 and sell it today you would earn a total of 14.00 from holding Impala Platinum Holdings or generate 2.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Impala Platinum Holdings vs. Anglo American Platinum
Performance |
| Timeline |
| Impala Platinum Holdings |
| Anglo American Platinum |
Impala Platinum and Anglo American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Impala Platinum and Anglo American
The main advantage of trading using opposite Impala Platinum and Anglo American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Impala Platinum 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.| Impala Platinum vs. Summa Silver Corp | Impala Platinum vs. Clean Air Metals | Impala Platinum vs. Morningstar Unconstrained Allocation | Impala Platinum vs. High Yield Municipal Fund |
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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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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