Correlation Between Anglo Asian and Symphony Environmental

Can any of the company-specific risk be diversified away by investing in both Anglo Asian and Symphony Environmental 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 Symphony Environmental 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 Symphony Environmental Technologies, you can compare the effects of market volatilities on Anglo Asian and Symphony Environmental 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 Symphony Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anglo Asian and Symphony Environmental.

Diversification Opportunities for Anglo Asian and Symphony Environmental

0.13

Correlation Coefficient

Anglo Asian  Symphony Environmental

Average diversification

The 3 months correlation between Anglo and Symphony is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Anglo Asian Mining and Symphony Environmental Technol in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Symphony Environmental 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 Symphony Environmental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Symphony Environmental has no effect on the direction of Anglo Asian i.e., Anglo Asian and Symphony Environmental go up and down completely randomly.

Pair Corralation between Anglo Asian and Symphony Environmental

Assuming the 90 days trading horizon Anglo Asian Mining is expected to generate 0.99 times more return on investment than Symphony Environmental. However, Anglo Asian Mining is 1.01 times less risky than Symphony Environmental. It trades about 0.12 of its potential returns per unit of risk. Symphony Environmental Technologies is currently generating about -0.3 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 Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Anglo Asian Mining  vs.  Symphony Environmental Technol

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.

Symphony Environmental

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Symphony Environmental Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Anglo Asian and Symphony Environmental

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

The idea behind Anglo Asian Mining and Symphony Environmental Technologies 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.

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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.