Correlation Between Savannah Resources and Antofagasta PLC
Can any of the company-specific risk be diversified away by investing in both Savannah Resources 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 Savannah Resources and Antofagasta PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Savannah Resources Plc and Antofagasta PLC, you can compare the effects of market volatilities on Savannah Resources 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 Savannah Resources with a short position of Antofagasta PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Savannah Resources and Antofagasta PLC.
Diversification Opportunities for Savannah Resources and Antofagasta PLC
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Savannah and Antofagasta is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Savannah Resources Plc and Antofagasta PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Antofagasta PLC and Savannah Resources 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 Savannah Resources Plc 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 Savannah Resources i.e., Savannah Resources and Antofagasta PLC go up and down completely randomly.
Pair Corralation between Savannah Resources and Antofagasta PLC
Assuming the 90 days trading horizon Savannah Resources Plc is expected to generate 1.72 times more return on investment than Antofagasta PLC. However, Savannah Resources is 1.72 times more volatile than Antofagasta PLC. It trades about 0.04 of its potential returns per unit of risk. Antofagasta PLC is currently generating about 0.01 per unit of risk. If you would invest 265.00 in Savannah Resources Plc on November 2, 2024 and sell it today you would earn a total of 160.00 from holding Savannah Resources Plc or generate 60.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Savannah Resources Plc vs. Antofagasta PLC
Performance |
| Timeline |
| Savannah Resources Plc |
| Antofagasta PLC |
Savannah Resources and Antofagasta PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Savannah Resources and Antofagasta PLC
The main advantage of trading using opposite Savannah Resources and Antofagasta PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Savannah Resources 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.| Savannah Resources vs. Spirent Communications plc | Savannah Resources vs. Various Eateries PLC | Savannah Resources vs. Gamma Communications PLC | Savannah Resources vs. Kaufman Et Broad |
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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 Global Correlations module to find global opportunities by holding instruments from different markets.
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