Correlation Between Antofagasta PLC and Technology Minerals

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

Diversification Opportunities for Antofagasta PLC and Technology Minerals

-0.8

Correlation Coefficient

Antofagasta PLC  Technology Minerals

Pay attention - limited upside

The 3 months correlation between Antofagasta and Technology is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Antofagasta PLC and Technology Minerals PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Technology 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 Technology Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Technology Minerals PLC has no effect on the direction of Antofagasta PLC i.e., Antofagasta PLC and Technology Minerals go up and down completely randomly.

Pair Corralation between Antofagasta PLC and Technology Minerals

Assuming the 90 days trading horizon Antofagasta PLC is expected to generate 0.31 times more return on investment than Technology Minerals. However, Antofagasta PLC is 3.2 times less risky than Technology Minerals. It trades about 0.09 of its potential returns per unit of risk. Technology Minerals PLC is currently generating about -0.1 per unit of risk. If you would invest  159,050  in Antofagasta PLC on December 28, 2024 and sell it today you would earn a total of  18,700  from holding Antofagasta PLC or generate 11.76% return on investment over 90 days.

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

Antofagasta PLC  vs.  Technology Minerals PLC

Antofagasta PLC

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Antofagasta PLC are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Antofagasta PLC unveiled solid returns over the last few months and may actually be approaching a breakup point.

Technology Minerals PLC

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Antofagasta PLC and Technology Minerals

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

The idea behind Antofagasta PLC and Technology 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.