Correlation Between Keweenaw Land and Anglo American
Can any of the company-specific risk be diversified away by investing in both Keweenaw Land 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 Keweenaw Land and Anglo American into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Keweenaw Land Association and Anglo American plc, you can compare the effects of market volatilities on Keweenaw Land 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 Keweenaw Land with a short position of Anglo American. Check out your portfolio center. Please also check ongoing floating volatility patterns of Keweenaw Land and Anglo American.
Diversification Opportunities for Keweenaw Land and Anglo American
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Keweenaw and Anglo is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Keweenaw Land Association 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 Keweenaw Land 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 Keweenaw Land Association 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 Keweenaw Land i.e., Keweenaw Land and Anglo American go up and down completely randomly.
Pair Corralation between Keweenaw Land and Anglo American
Given the investment horizon of 90 days Keweenaw Land Association is expected to generate 2.22 times more return on investment than Anglo American. However, Keweenaw Land is 2.22 times more volatile than Anglo American plc. It trades about 0.06 of its potential returns per unit of risk. Anglo American plc is currently generating about -0.04 per unit of risk. If you would invest 3,600 in Keweenaw Land Association on August 25, 2024 and sell it today you would earn a total of 152.00 from holding Keweenaw Land Association or generate 4.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Keweenaw Land Association vs. Anglo American plc
Performance |
| Timeline |
| Keweenaw Land Association |
| Anglo American plc |
Keweenaw Land and Anglo American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Keweenaw Land and Anglo American
The main advantage of trading using opposite Keweenaw Land and Anglo American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Keweenaw Land 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.| Keweenaw Land vs. Anglo American plc | Keweenaw Land vs. Glencore PLC ADR | Keweenaw Land vs. Fortescue Metals Group | Keweenaw Land vs. South32 Limited |
| Anglo American vs. Glencore PLC ADR | Anglo American vs. Fortescue Metals Group | Anglo American vs. South32 Limited | Anglo American vs. South32 ADR |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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