Correlation Between Anglo American and QINGCI GAMES
Can any of the company-specific risk be diversified away by investing in both Anglo American and QINGCI GAMES 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 Anglo American and QINGCI GAMES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Anglo American plc and QINGCI GAMES INC, you can compare the effects of market volatilities on Anglo American and QINGCI GAMES 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 Anglo American with a short position of QINGCI GAMES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anglo American and QINGCI GAMES.
Diversification Opportunities for Anglo American and QINGCI GAMES
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Anglo and QINGCI is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Anglo American plc and QINGCI GAMES INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on QINGCI GAMES INC and Anglo American 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 Anglo American plc are associated (or correlated) with QINGCI GAMES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of QINGCI GAMES INC has no effect on the direction of Anglo American i.e., Anglo American and QINGCI GAMES go up and down completely randomly.
Pair Corralation between Anglo American and QINGCI GAMES
Assuming the 90 days trading horizon Anglo American plc is expected to generate 0.73 times more return on investment than QINGCI GAMES. However, Anglo American plc is 1.37 times less risky than QINGCI GAMES. It trades about 0.04 of its potential returns per unit of risk. QINGCI GAMES INC is currently generating about -0.01 per unit of risk. If you would invest 2,796 in Anglo American plc on September 5, 2024 and sell it today you would earn a total of 228.00 from holding Anglo American plc or generate 8.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Anglo American plc vs. QINGCI GAMES INC
Performance |
| Timeline |
| Anglo American plc |
| QINGCI GAMES INC |
Anglo American and QINGCI GAMES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anglo American and QINGCI GAMES
The main advantage of trading using opposite Anglo American and QINGCI GAMES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anglo American position performs unexpectedly, QINGCI GAMES 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 QINGCI GAMES will offset losses from the drop in QINGCI GAMES's long position.| Anglo American vs. QINGCI GAMES INC | Anglo American vs. STMicroelectronics NV | Anglo American vs. HOCHSCHILD MINING | Anglo American vs. Penn National Gaming |
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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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