Correlation Between CA Sales and AngloGold Ashanti

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

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

Diversification Opportunities for CA Sales and AngloGold Ashanti

-0.55

Correlation Coefficient

CA Sales  AngloGold Ashanti

Excellent diversification

The 3 months correlation between CAA and AngloGold is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding CA Sales Holdings and AngloGold Ashanti in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AngloGold Ashanti and CA Sales 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 CA Sales Holdings 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 CA Sales i.e., CA Sales and AngloGold Ashanti go up and down completely randomly.

Pair Corralation between CA Sales and AngloGold Ashanti

Assuming the 90 days trading horizon CA Sales is expected to generate 2.22 times less return on investment than AngloGold Ashanti. In addition to that, CA Sales is 1.28 times more volatile than AngloGold Ashanti. It trades about 0.05 of its total potential returns per unit of risk. AngloGold Ashanti is currently generating about 0.13 per unit of volatility. If you would invest  4,595,900  in AngloGold Ashanti on October 26, 2024 and sell it today you would earn a total of  584,000  from holding AngloGold Ashanti or generate 12.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	97.56%
Values	Daily Returns

CA Sales Holdings  vs.  AngloGold Ashanti

CA Sales Holdings

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in CA Sales Holdings are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical and fundamental indicators, CA Sales may actually be approaching a critical reversion point that can send shares even higher in February 2025.

AngloGold Ashanti

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in AngloGold Ashanti are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, AngloGold Ashanti is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with CA Sales and AngloGold Ashanti

The main advantage of trading using opposite CA Sales and AngloGold Ashanti positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CA Sales 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 CA Sales Holdings 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.