Correlation Between Liontown Resources and Anglo American
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By analyzing existing cross correlation between Liontown Resources Limited and Anglo American plc, you can compare the effects of market volatilities on Liontown Resources 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 Liontown Resources with a short position of Anglo American. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liontown Resources and Anglo American.
Diversification Opportunities for Liontown Resources and Anglo American
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Liontown and Anglo is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Liontown Resources Limited 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 Liontown Resources 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 Liontown Resources Limited 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 Liontown Resources i.e., Liontown Resources and Anglo American go up and down completely randomly.
Pair Corralation between Liontown Resources and Anglo American
Assuming the 90 days horizon Liontown Resources Limited is expected to under-perform the Anglo American. In addition to that, Liontown Resources is 2.54 times more volatile than Anglo American plc. It trades about -0.43 of its total potential returns per unit of risk. Anglo American plc is currently generating about -0.01 per unit of volatility. If you would invest 2,839 in Anglo American plc on September 24, 2024 and sell it today you would lose (19.00) from holding Anglo American plc or give up 0.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Liontown Resources Limited vs. Anglo American plc
Performance |
| Timeline |
| Liontown Resources |
| Anglo American plc |
Liontown Resources and Anglo American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liontown Resources and Anglo American
The main advantage of trading using opposite Liontown Resources and Anglo American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liontown Resources 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.| Liontown Resources vs. Rio Tinto Group | Liontown Resources vs. Anglo American plc | Liontown Resources vs. NEXA RESOURCES SA | Liontown Resources vs. STRAITS TRADG SD |
| Anglo American vs. Rio Tinto Group | Anglo American vs. Liontown Resources Limited | Anglo American vs. NEXA RESOURCES SA | Anglo American vs. STRAITS TRADG SD |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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