Correlation Between Datalogic SpA and ANGLO ASIAN

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

By analyzing existing cross correlation between Datalogic SpA and ANGLO ASIAN MINING, you can compare the effects of market volatilities on Datalogic SpA and ANGLO ASIAN 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 Datalogic SpA with a short position of ANGLO ASIAN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Datalogic SpA and ANGLO ASIAN.

Diversification Opportunities for Datalogic SpA and ANGLO ASIAN

0.41

Correlation Coefficient

Datalogic SpA  ANGLO ASIAN

Very weak diversification

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

Pair Corralation between Datalogic SpA and ANGLO ASIAN

Assuming the 90 days trading horizon Datalogic SpA is expected to under-perform the ANGLO ASIAN. But the stock apears to be less risky and, when comparing its historical volatility, Datalogic SpA is 1.1 times less risky than ANGLO ASIAN. The stock trades about -0.14 of its potential returns per unit of risk. The ANGLO ASIAN MINING is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest  136.00  in ANGLO ASIAN MINING on October 6, 2024 and sell it today you would lose (12.00) from holding ANGLO ASIAN MINING or give up 8.82% of portfolio value over 90 days.

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

Datalogic SpA  vs.  ANGLO ASIAN MINING

Datalogic SpA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Datalogic SpA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

ANGLO ASIAN MINING

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ANGLO ASIAN MINING has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Datalogic SpA and ANGLO ASIAN

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

The idea behind Datalogic SpA and ANGLO ASIAN MINING 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.