Correlation Between Sherritt International and Anglo American
Can any of the company-specific risk be diversified away by investing in both Sherritt International 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 Sherritt International and Anglo American into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sherritt International and Anglo American PLC, you can compare the effects of market volatilities on Sherritt International 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 Sherritt International with a short position of Anglo American. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sherritt International and Anglo American.
Diversification Opportunities for Sherritt International and Anglo American
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sherritt and Anglo is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Sherritt International and Anglo American PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anglo American PLC and Sherritt International 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 Sherritt International 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 PLC has no effect on the direction of Sherritt International i.e., Sherritt International and Anglo American go up and down completely randomly.
Pair Corralation between Sherritt International and Anglo American
Assuming the 90 days horizon Sherritt International is expected to under-perform the Anglo American. But the pink sheet apears to be less risky and, when comparing its historical volatility, Sherritt International is 1.24 times less risky than Anglo American. The pink sheet trades about -0.32 of its potential returns per unit of risk. The Anglo American PLC is currently generating about 0.07 of returns per unit of risk over similar time horizon. 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 |
Sherritt International vs. Anglo American PLC
Performance |
| Timeline |
| Sherritt International |
| Anglo American PLC |
Sherritt International and Anglo American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sherritt International and Anglo American
The main advantage of trading using opposite Sherritt International and Anglo American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sherritt International 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.| Sherritt International vs. Metals X Limited | Sherritt International vs. Interra Copper Corp | Sherritt International vs. Anglo American PLC | Sherritt International vs. OM Holdings Limited |
| Anglo American vs. South32 Limited | Anglo American vs. NioCorp Developments Ltd | Anglo American vs. HUMANA INC | Anglo American vs. SCOR PK |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments |