Correlation Between WixCom and Antofagasta PLC
Can any of the company-specific risk be diversified away by investing in both WixCom 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 WixCom and Antofagasta PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WixCom and Antofagasta PLC, you can compare the effects of market volatilities on WixCom 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 WixCom with a short position of Antofagasta PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of WixCom and Antofagasta PLC.
Diversification Opportunities for WixCom and Antofagasta PLC
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between WixCom and Antofagasta is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding WixCom and Antofagasta PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Antofagasta PLC and WixCom 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 WixCom 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 WixCom i.e., WixCom and Antofagasta PLC go up and down completely randomly.
Pair Corralation between WixCom and Antofagasta PLC
Considering the 90-day investment horizon WixCom is expected to generate 0.81 times more return on investment than Antofagasta PLC. However, WixCom is 1.23 times less risky than Antofagasta PLC. It trades about 0.1 of its potential returns per unit of risk. Antofagasta PLC is currently generating about -0.07 per unit of risk. If you would invest 16,506 in WixCom on August 25, 2024 and sell it today you would earn a total of 5,214 from holding WixCom or generate 31.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
WixCom vs. Antofagasta PLC
Performance |
| Timeline |
| WixCom |
| Antofagasta PLC |
WixCom and Antofagasta PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WixCom and Antofagasta PLC
The main advantage of trading using opposite WixCom and Antofagasta PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WixCom 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.The idea behind WixCom and Antofagasta PLC pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Antofagasta PLC vs. Bell Copper | Antofagasta PLC vs. Arizona Sonoran Copper | Antofagasta PLC vs. Dor Copper Mining | Antofagasta PLC vs. CopperCorp 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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