Correlation Between Heavitree Brewery and Anglo Asian

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

By analyzing existing cross correlation between Heavitree Brewery and Anglo Asian Mining, you can compare the effects of market volatilities on Heavitree Brewery 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 Heavitree Brewery with a short position of Anglo Asian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Heavitree Brewery and Anglo Asian.

Diversification Opportunities for Heavitree Brewery and Anglo Asian

-0.56

Correlation Coefficient

Heavitree Brewery  Anglo Asian

Excellent diversification

The 3 months correlation between Heavitree and Anglo is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Heavitree Brewery 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 Heavitree Brewery 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 Heavitree Brewery 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 Heavitree Brewery i.e., Heavitree Brewery and Anglo Asian go up and down completely randomly.

Pair Corralation between Heavitree Brewery and Anglo Asian

Assuming the 90 days trading horizon Heavitree Brewery is expected to under-perform the Anglo Asian. In addition to that, Heavitree Brewery is 1.23 times more volatile than Anglo Asian Mining. It trades about -0.09 of its total potential returns per unit of risk. Anglo Asian Mining is currently generating about 0.08 per unit of volatility. If you would invest  10,500  in Anglo Asian Mining on December 24, 2024 and sell it today you would earn a total of  1,350  from holding Anglo Asian Mining or generate 12.86% return on investment over 90 days.

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

Heavitree Brewery  vs.  Anglo Asian Mining

Heavitree Brewery

Risk-Adjusted Performance

Very Weak

Over the last 90 days Heavitree Brewery has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Anglo Asian Mining

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Anglo Asian Mining are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Anglo Asian exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Heavitree Brewery and Anglo Asian

The main advantage of trading using opposite Heavitree Brewery and Anglo Asian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Heavitree Brewery 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 Heavitree Brewery 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.

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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..