Correlation Between Coreshares Index and AngloGold Ashanti

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

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

Diversification Opportunities for Coreshares Index and AngloGold Ashanti

0.37

Correlation Coefficient

Coreshares Index  AngloGold Ashanti

Weak diversification

The 3 months correlation between Coreshares and AngloGold is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Coreshares Index Tracker and AngloGold Ashanti in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AngloGold Ashanti and Coreshares Index 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 Coreshares Index Tracker are associated (or correlated) with AngloGold Ashanti. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AngloGold Ashanti has no effect on the direction of Coreshares Index i.e., Coreshares Index and AngloGold Ashanti go up and down completely randomly.

Pair Corralation between Coreshares Index and AngloGold Ashanti

Assuming the 90 days trading horizon Coreshares Index is expected to generate 31.57 times less return on investment than AngloGold Ashanti. But when comparing it to its historical volatility, Coreshares Index Tracker is 3.08 times less risky than AngloGold Ashanti. It trades about 0.03 of its potential returns per unit of risk. AngloGold Ashanti is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest  4,230,498  in AngloGold Ashanti on December 26, 2024 and sell it today you would earn a total of  2,290,602  from holding AngloGold Ashanti or generate 54.14% return on investment over 90 days.

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

Coreshares Index Tracker  vs.  AngloGold Ashanti

Coreshares Index Tracker

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Coreshares Index Tracker are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental indicators, Coreshares Index is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

AngloGold Ashanti

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in AngloGold Ashanti are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, AngloGold Ashanti exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Coreshares Index and AngloGold Ashanti

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

The idea behind Coreshares Index Tracker and AngloGold Ashanti 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 Commodity Directory module to find actively traded commodities issued by global exchanges.