Correlation Between Adidas AG and ANGLO ASIAN

Can any of the company-specific risk be diversified away by investing in both Adidas AG and ANGLO ASIAN 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 Adidas AG and ANGLO ASIAN into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between adidas AG and ANGLO ASIAN MINING, you can compare the effects of market volatilities on Adidas AG and ANGLO ASIAN 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 Adidas AG with a short position of ANGLO ASIAN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adidas AG and ANGLO ASIAN.

Diversification Opportunities for Adidas AG and ANGLO ASIAN

0.0

Correlation Coefficient

Adidas AG  ANGLO ASIAN

Pay attention - limited upside

The 3 months correlation between Adidas and ANGLO is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding adidas AG and ANGLO ASIAN MINING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANGLO ASIAN MINING and Adidas AG 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 adidas AG are associated (or correlated) with ANGLO ASIAN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANGLO ASIAN MINING has no effect on the direction of Adidas AG i.e., Adidas AG and ANGLO ASIAN go up and down completely randomly.

Pair Corralation between Adidas AG and ANGLO ASIAN

If you would invest  125.00  in ANGLO ASIAN MINING on October 27, 2024 and sell it today you would earn a total of  4.00  from holding ANGLO ASIAN MINING or generate 3.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	5.26%
Values	Daily Returns

adidas AG  vs.  ANGLO ASIAN MINING

adidas AG

Risk-Adjusted Performance

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Good

Over the last 90 days adidas AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Adidas AG is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

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 rather sound basic indicators, ANGLO ASIAN is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Adidas AG and ANGLO ASIAN

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

The idea behind adidas AG and ANGLO ASIAN MINING 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.