Correlation Between Anglo American and CITIC Resources
Can any of the company-specific risk be diversified away by investing in both Anglo American and CITIC Resources 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 CITIC Resources 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 CITIC Resources Holdings, you can compare the effects of market volatilities on Anglo American and CITIC Resources 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 CITIC Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anglo American and CITIC Resources.
Diversification Opportunities for Anglo American and CITIC Resources
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Anglo and CITIC is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Anglo American PLC and CITIC Resources Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CITIC Resources Holdings 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 CITIC Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CITIC Resources Holdings has no effect on the direction of Anglo American i.e., Anglo American and CITIC Resources go up and down completely randomly.
Pair Corralation between Anglo American and CITIC Resources
If you would invest 8.00 in CITIC Resources Holdings on August 31, 2024 and sell it today you would earn a total of 0.00 from holding CITIC Resources Holdings or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
Anglo American PLC vs. CITIC Resources Holdings
Performance |
| Timeline |
| Anglo American PLC |
| CITIC Resources Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Anglo American and CITIC Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anglo American and CITIC Resources
The main advantage of trading using opposite Anglo American and CITIC Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anglo American position performs unexpectedly, CITIC Resources 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 CITIC Resources will offset losses from the drop in CITIC Resources' long position.| Anglo American vs. BHP Group Limited | Anglo American vs. Avarone Metals | Anglo American vs. Huntsman Exploration | Anglo American vs. Aurelia Metals Limited |
| CITIC Resources vs. Sherritt International | CITIC Resources vs. Metals X Limited | CITIC Resources vs. Interra Copper Corp | CITIC Resources vs. Anglo American PLC |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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