Correlation Between Caltagirone SpA and Antofagasta Plc
Can any of the company-specific risk be diversified away by investing in both Caltagirone SpA and Antofagasta Plc 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 Caltagirone SpA and Antofagasta Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Caltagirone SpA and Antofagasta plc, you can compare the effects of market volatilities on Caltagirone SpA and Antofagasta Plc 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 Caltagirone SpA with a short position of Antofagasta Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caltagirone SpA and Antofagasta Plc.
Diversification Opportunities for Caltagirone SpA and Antofagasta Plc
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Caltagirone and Antofagasta is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Caltagirone SpA and Antofagasta plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Antofagasta plc and Caltagirone SpA 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 Caltagirone SpA are associated (or correlated) with Antofagasta Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Antofagasta plc has no effect on the direction of Caltagirone SpA i.e., Caltagirone SpA and Antofagasta Plc go up and down completely randomly.
Pair Corralation between Caltagirone SpA and Antofagasta Plc
Assuming the 90 days trading horizon Caltagirone SpA is expected to generate 0.87 times more return on investment than Antofagasta Plc. However, Caltagirone SpA is 1.15 times less risky than Antofagasta Plc. It trades about 0.09 of its potential returns per unit of risk. Antofagasta plc is currently generating about 0.03 per unit of risk. If you would invest 261.00 in Caltagirone SpA on September 14, 2024 and sell it today you would earn a total of 347.00 from holding Caltagirone SpA or generate 132.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Caltagirone SpA vs. Antofagasta plc
Performance |
| Timeline |
| Caltagirone SpA |
| Antofagasta plc |
Caltagirone SpA and Antofagasta Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caltagirone SpA and Antofagasta Plc
The main advantage of trading using opposite Caltagirone SpA and Antofagasta Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caltagirone SpA position performs unexpectedly, Antofagasta Plc 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 Antofagasta Plc will offset losses from the drop in Antofagasta Plc's long position.| Caltagirone SpA vs. Apple Inc | Caltagirone SpA vs. Apple Inc | Caltagirone SpA vs. Apple Inc | Caltagirone SpA vs. Apple Inc |
| Antofagasta Plc vs. Chunghwa Telecom Co | Antofagasta Plc vs. Charter Communications | Antofagasta Plc vs. Citic Telecom International | Antofagasta Plc vs. Caltagirone SpA |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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