Correlation Between Zimplats Holdings and Anglo American
Can any of the company-specific risk be diversified away by investing in both Zimplats Holdings 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 Zimplats Holdings and Anglo American into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Zimplats Holdings Limited and Anglo American Platinum, you can compare the effects of market volatilities on Zimplats Holdings 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 Zimplats Holdings with a short position of Anglo American. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zimplats Holdings and Anglo American.
Diversification Opportunities for Zimplats Holdings and Anglo American
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Zimplats and Anglo is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Zimplats Holdings Limited 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 Zimplats Holdings 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 Zimplats Holdings Limited 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 Zimplats Holdings i.e., Zimplats Holdings and Anglo American go up and down completely randomly.
Pair Corralation between Zimplats Holdings and Anglo American
Assuming the 90 days horizon Zimplats Holdings Limited is expected to under-perform the Anglo American. In addition to that, Zimplats Holdings is 1.28 times more volatile than Anglo American Platinum. It trades about -0.05 of its total potential returns per unit of risk. Anglo American Platinum is currently generating about -0.07 per unit of volatility. If you would invest 4,100 in Anglo American Platinum on August 26, 2024 and sell it today you would lose (333.00) from holding Anglo American Platinum or give up 8.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zimplats Holdings Limited vs. Anglo American Platinum
Performance |
| Timeline |
| Zimplats Holdings |
| Anglo American Platinum |
Zimplats Holdings and Anglo American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zimplats Holdings and Anglo American
The main advantage of trading using opposite Zimplats Holdings and Anglo American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zimplats Holdings 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.| Zimplats Holdings vs. Morningstar Unconstrained Allocation | Zimplats Holdings vs. High Yield Municipal Fund | Zimplats Holdings vs. Knife River | Zimplats Holdings vs. Klckner Co SE |
| Anglo American vs. Morningstar Unconstrained Allocation | Anglo American vs. High Yield Municipal Fund | Anglo American vs. Knife River | Anglo American vs. Klckner Co SE |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |