Correlation Between Anglo American and OM Holdings
Can any of the company-specific risk be diversified away by investing in both Anglo American and OM Holdings 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 OM Holdings 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 OM Holdings Limited, you can compare the effects of market volatilities on Anglo American and OM Holdings 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 OM Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anglo American and OM Holdings.
Diversification Opportunities for Anglo American and OM Holdings
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Anglo and OMHLF is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Anglo American PLC and OM Holdings Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OM Holdings Limited 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 OM Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OM Holdings Limited has no effect on the direction of Anglo American i.e., Anglo American and OM Holdings go up and down completely randomly.
Pair Corralation between Anglo American and OM Holdings
If you would invest 1,554 in Anglo American PLC on September 2, 2024 and sell it today you would earn a total of 52.00 from holding Anglo American PLC or generate 3.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Anglo American PLC vs. OM Holdings Limited
Performance |
| Timeline |
| Anglo American PLC |
| OM Holdings Limited |
Anglo American and OM Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anglo American and OM Holdings
The main advantage of trading using opposite Anglo American and OM Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anglo American position performs unexpectedly, OM Holdings 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 OM Holdings will offset losses from the drop in OM Holdings' long position.| Anglo American vs. South32 Limited | Anglo American vs. NioCorp Developments Ltd | Anglo American vs. HUMANA INC | Anglo American vs. SCOR PK |
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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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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