Correlation Between Klöckner and Anglo American
Can any of the company-specific risk be diversified away by investing in both Klöckner 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 Klöckner and Anglo American into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Klckner Co SE and Anglo American Platinum, you can compare the effects of market volatilities on Klöckner 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 Klöckner with a short position of Anglo American. Check out your portfolio center. Please also check ongoing floating volatility patterns of Klöckner and Anglo American.
Diversification Opportunities for Klöckner and Anglo American
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Klöckner and Anglo is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Klckner Co SE 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 Klöckner 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 Klckner Co SE 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 Klöckner i.e., Klöckner and Anglo American go up and down completely randomly.
Pair Corralation between Klöckner and Anglo American
Assuming the 90 days horizon Klckner Co SE is expected to under-perform the Anglo American. But the pink sheet apears to be less risky and, when comparing its historical volatility, Klckner Co SE is 1.0 times less risky than Anglo American. The pink sheet trades about -0.05 of its potential returns per unit of risk. The Anglo American Platinum is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 3,306 in Anglo American Platinum on August 29, 2024 and sell it today you would lose (14.00) from holding Anglo American Platinum or give up 0.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.41% |
| Values | Daily Returns |
Klckner Co SE vs. Anglo American Platinum
Performance |
| Timeline |
| Klckner Co SE |
| Anglo American Platinum |
Klöckner and Anglo American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Klöckner and Anglo American
The main advantage of trading using opposite Klöckner and Anglo American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Klöckner 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.| Klöckner vs. Companhia Siderurgica Nacional | Klöckner vs. Olympic Steel | Klöckner vs. Universal Stainless Alloy | Klöckner vs. Usinas Siderurgicas de |
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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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