Correlation Between AngloGold Ashanti and Chemours

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

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

Diversification Opportunities for AngloGold Ashanti and Chemours

-0.41

Correlation Coefficient

AngloGold Ashanti  Chemours

Very good diversification

The 3 months correlation between AngloGold and Chemours is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding AngloGold Ashanti plc and Chemours Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chemours and AngloGold Ashanti 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 AngloGold Ashanti plc are associated (or correlated) with Chemours. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chemours has no effect on the direction of AngloGold Ashanti i.e., AngloGold Ashanti and Chemours go up and down completely randomly.

Pair Corralation between AngloGold Ashanti and Chemours

Allowing for the 90-day total investment horizon AngloGold Ashanti plc is expected to under-perform the Chemours. But the stock apears to be less risky and, when comparing its historical volatility, AngloGold Ashanti plc is 1.39 times less risky than Chemours. The stock trades about -0.22 of its potential returns per unit of risk. The Chemours Co is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  1,805  in Chemours Co on August 30, 2024 and sell it today you would earn a total of  377.00  from holding Chemours Co or generate 20.89% return on investment over 90 days.

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

AngloGold Ashanti plc  vs.  Chemours Co

AngloGold Ashanti plc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AngloGold Ashanti plc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in December 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Chemours

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Chemours Co are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile fundamental indicators, Chemours exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AngloGold Ashanti and Chemours

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

The idea behind AngloGold Ashanti plc and Chemours Co 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.