Correlation Between Antofagasta PLC and Hardide PLC

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

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

Diversification Opportunities for Antofagasta PLC and Hardide PLC

0.83

Correlation Coefficient

Antofagasta PLC  Hardide PLC

Very poor diversification

The 3 months correlation between Antofagasta and Hardide is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Antofagasta PLC and Hardide PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hardide PLC and Antofagasta PLC 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 Antofagasta PLC are associated (or correlated) with Hardide PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hardide PLC has no effect on the direction of Antofagasta PLC i.e., Antofagasta PLC and Hardide PLC go up and down completely randomly.

Pair Corralation between Antofagasta PLC and Hardide PLC

Assuming the 90 days trading horizon Antofagasta PLC is expected to under-perform the Hardide PLC. But the stock apears to be less risky and, when comparing its historical volatility, Antofagasta PLC is 1.46 times less risky than Hardide PLC. The stock trades about -0.05 of its potential returns per unit of risk. The Hardide PLC is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  435.00  in Hardide PLC on September 19, 2024 and sell it today you would earn a total of  40.00  from holding Hardide PLC or generate 9.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Antofagasta PLC  vs.  Hardide PLC

Antofagasta PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Antofagasta PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Hardide PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hardide PLC 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 January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Antofagasta PLC and Hardide PLC

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

The idea behind Antofagasta PLC and Hardide 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.