Correlation Between Antofagasta Plc and CHRYSALIS INVESTMENTS

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

By analyzing existing cross correlation between Antofagasta plc and CHRYSALIS INVESTMENTS LTD, you can compare the effects of market volatilities on Antofagasta Plc and CHRYSALIS INVESTMENTS 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 Antofagasta Plc with a short position of CHRYSALIS INVESTMENTS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Antofagasta Plc and CHRYSALIS INVESTMENTS.

Diversification Opportunities for Antofagasta Plc and CHRYSALIS INVESTMENTS

-0.47

Correlation Coefficient

Antofagasta Plc  CHRYSALIS INVESTMENTS

Very good diversification

The 3 months correlation between Antofagasta and CHRYSALIS is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Antofagasta plc and CHRYSALIS INVESTMENTS LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHRYSALIS INVESTMENTS LTD and Antofagasta Plc 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 Antofagasta plc are associated (or correlated) with CHRYSALIS INVESTMENTS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHRYSALIS INVESTMENTS LTD has no effect on the direction of Antofagasta Plc i.e., Antofagasta Plc and CHRYSALIS INVESTMENTS go up and down completely randomly.

Pair Corralation between Antofagasta Plc and CHRYSALIS INVESTMENTS

Assuming the 90 days horizon Antofagasta plc is expected to under-perform the CHRYSALIS INVESTMENTS. But the stock apears to be less risky and, when comparing its historical volatility, Antofagasta plc is 1.27 times less risky than CHRYSALIS INVESTMENTS. The stock trades about -0.42 of its potential returns per unit of risk. The CHRYSALIS INVESTMENTS LTD is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest  115.00  in CHRYSALIS INVESTMENTS LTD on October 11, 2024 and sell it today you would earn a total of  10.00  from holding CHRYSALIS INVESTMENTS LTD or generate 8.7% return on investment over 90 days.

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

Antofagasta plc  vs.  CHRYSALIS INVESTMENTS LTD

Antofagasta plc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Antofagasta plc 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.

CHRYSALIS INVESTMENTS LTD

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CHRYSALIS INVESTMENTS LTD are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, CHRYSALIS INVESTMENTS reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Antofagasta Plc and CHRYSALIS INVESTMENTS

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

The idea behind Antofagasta plc and CHRYSALIS INVESTMENTS LTD 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.