Correlation Between Antofagasta PLC and Kodal Minerals

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

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

Diversification Opportunities for Antofagasta PLC and Kodal Minerals

0.42

Correlation Coefficient

Antofagasta PLC  Kodal Minerals

Very weak diversification

The 3 months correlation between Antofagasta and Kodal is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Antofagasta PLC and Kodal Minerals PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kodal Minerals 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 Kodal Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kodal Minerals PLC has no effect on the direction of Antofagasta PLC i.e., Antofagasta PLC and Kodal Minerals go up and down completely randomly.

Pair Corralation between Antofagasta PLC and Kodal Minerals

Assuming the 90 days trading horizon Antofagasta PLC is expected to under-perform the Kodal Minerals. But the stock apears to be less risky and, when comparing its historical volatility, Antofagasta PLC is 1.83 times less risky than Kodal Minerals. The stock trades about -0.1 of its potential returns per unit of risk. The Kodal Minerals PLC is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  60.00  in Kodal Minerals PLC on October 7, 2024 and sell it today you would lose (15.00) from holding Kodal Minerals PLC or give up 25.0% of portfolio value over 90 days.

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

Antofagasta PLC  vs.  Kodal Minerals 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 unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Kodal Minerals PLC

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Kodal Minerals PLC are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Kodal Minerals may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Antofagasta PLC and Kodal Minerals

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

The idea behind Antofagasta PLC and Kodal Minerals 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.