Correlation Between Reservoir Media and Anglo American
Can any of the company-specific risk be diversified away by investing in both Reservoir Media and Anglo American 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 Reservoir Media and Anglo American into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Reservoir Media and Anglo American Platinum, you can compare the effects of market volatilities on Reservoir Media 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 Reservoir Media with a short position of Anglo American. Check out your portfolio center. Please also check ongoing floating volatility patterns of Reservoir Media and Anglo American.
Diversification Opportunities for Reservoir Media and Anglo American
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Reservoir and Anglo is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Reservoir Media and Anglo American Platinum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anglo American Platinum and Reservoir Media 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 Reservoir Media 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 Platinum has no effect on the direction of Reservoir Media i.e., Reservoir Media and Anglo American go up and down completely randomly.
Pair Corralation between Reservoir Media and Anglo American
Given the investment horizon of 90 days Reservoir Media is expected to generate 0.39 times more return on investment than Anglo American. However, Reservoir Media is 2.59 times less risky than Anglo American. It trades about 0.03 of its potential returns per unit of risk. Anglo American Platinum is currently generating about -0.02 per unit of risk. If you would invest 686.00 in Reservoir Media on October 7, 2024 and sell it today you would earn a total of 163.00 from holding Reservoir Media or generate 23.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 73.79% |
| Values | Daily Returns |
Reservoir Media vs. Anglo American Platinum
Performance |
| Timeline |
| Reservoir Media |
| Anglo American Platinum |
Reservoir Media and Anglo American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Reservoir Media and Anglo American
The main advantage of trading using opposite Reservoir Media and Anglo American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Reservoir Media 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.| Reservoir Media vs. Reading International | Reservoir Media vs. Marcus | Reservoir Media vs. Gaia Inc | Reservoir Media vs. News Corp B |
| Anglo American vs. Mantaro Silver Corp | Anglo American vs. Monumental Minerals Corp | Anglo American vs. Silver Wolf Exploration | Anglo American vs. Riverside Resources |
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 Stocks Directory module to find actively traded stocks across global markets.
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