Correlation Between Jubilee Platinum and Anglo American
Can any of the company-specific risk be diversified away by investing in both Jubilee 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 Jubilee 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 Jubilee Platinum and Anglo American PLC, you can compare the effects of market volatilities on Jubilee 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 Jubilee Platinum with a short position of Anglo American. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jubilee Platinum and Anglo American.
Diversification Opportunities for Jubilee Platinum and Anglo American
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Jubilee and Anglo is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Jubilee Platinum 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 Jubilee 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 Jubilee Platinum 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 Jubilee Platinum i.e., Jubilee Platinum and Anglo American go up and down completely randomly.
Pair Corralation between Jubilee Platinum and Anglo American
Assuming the 90 days trading horizon Jubilee Platinum is expected to generate 3.35 times more return on investment than Anglo American. However, Jubilee Platinum is 3.35 times more volatile than Anglo American PLC. It trades about 0.11 of its potential returns per unit of risk. Anglo American PLC is currently generating about -0.03 per unit of risk. If you would invest 8,600 in Jubilee Platinum on November 2, 2024 and sell it today you would earn a total of 900.00 from holding Jubilee Platinum or generate 10.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Jubilee Platinum vs. Anglo American PLC
Performance |
| Timeline |
| Jubilee Platinum |
| Anglo American PLC |
Jubilee Platinum and Anglo American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jubilee Platinum and Anglo American
The main advantage of trading using opposite Jubilee Platinum and Anglo American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jubilee 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.| Jubilee Platinum vs. ABSA Bank Limited | Jubilee Platinum vs. We Buy Cars | Jubilee Platinum vs. Hosken Consolidated Investments | Jubilee Platinum vs. CA Sales Holdings |
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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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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