Correlation Between Anglo Asian and Panther Metals

Can any of the company-specific risk be diversified away by investing in both Anglo Asian and Panther Metals 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 Anglo Asian and Panther Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Anglo Asian Mining and Panther Metals PLC, you can compare the effects of market volatilities on Anglo Asian and Panther Metals 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 Anglo Asian with a short position of Panther Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anglo Asian and Panther Metals.

Diversification Opportunities for Anglo Asian and Panther Metals

-0.44

Correlation Coefficient

Anglo Asian  Panther Metals

Very good diversification

The 3 months correlation between Anglo and Panther is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Anglo Asian Mining and Panther Metals PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Panther Metals PLC and Anglo Asian 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 Anglo Asian Mining are associated (or correlated) with Panther Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Panther Metals PLC has no effect on the direction of Anglo Asian i.e., Anglo Asian and Panther Metals go up and down completely randomly.

Pair Corralation between Anglo Asian and Panther Metals

Assuming the 90 days trading horizon Anglo Asian Mining is expected to generate 0.53 times more return on investment than Panther Metals. However, Anglo Asian Mining is 1.87 times less risky than Panther Metals. It trades about 0.12 of its potential returns per unit of risk. Panther Metals PLC is currently generating about -0.36 per unit of risk. If you would invest  10,000  in Anglo Asian Mining on October 5, 2024 and sell it today you would earn a total of  400.00  from holding Anglo Asian Mining or generate 4.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Anglo Asian Mining  vs.  Panther Metals PLC

Anglo Asian Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Anglo Asian Mining has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Panther Metals PLC

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Panther Metals PLC are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Panther Metals unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Anglo Asian and Panther Metals

The main advantage of trading using opposite Anglo Asian and Panther Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anglo Asian position performs unexpectedly, Panther Metals 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 Panther Metals will offset losses from the drop in Panther Metals' long position.

The idea behind Anglo Asian Mining and Panther Metals 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.

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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.