Correlation Between AngloGold Ashanti and Enlightify

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

Diversification Opportunities for AngloGold Ashanti and Enlightify

0.65

Correlation Coefficient

AngloGold Ashanti  Enlightify

Poor diversification

The 3 months correlation between AngloGold and Enlightify is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding AngloGold Ashanti plc and Enlightify in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enlightify 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 Enlightify. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enlightify has no effect on the direction of AngloGold Ashanti i.e., AngloGold Ashanti and Enlightify go up and down completely randomly.

Pair Corralation between AngloGold Ashanti and Enlightify

Allowing for the 90-day total investment horizon AngloGold Ashanti plc is expected to generate 0.61 times more return on investment than Enlightify. However, AngloGold Ashanti plc is 1.64 times less risky than Enlightify. It trades about -0.06 of its potential returns per unit of risk. Enlightify is currently generating about -0.19 per unit of risk. If you would invest  2,551  in AngloGold Ashanti plc on October 10, 2024 and sell it today you would lose (106.00) from holding AngloGold Ashanti plc or give up 4.16% of portfolio value over 90 days.

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

AngloGold Ashanti plc  vs.  Enlightify

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 latest weak 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.

Enlightify

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Enlightify has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with AngloGold Ashanti and Enlightify

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

The idea behind AngloGold Ashanti plc and Enlightify 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.

Check out your portfolio center.

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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.