Correlation Between MC Mining and AngloGold Ashanti

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

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

Diversification Opportunities for MC Mining and AngloGold Ashanti

-0.59

Correlation Coefficient

MC Mining  AngloGold Ashanti

Excellent diversification

The 3 months correlation between MCZ and AngloGold is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding MC Mining and AngloGold Ashanti in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AngloGold Ashanti and MC Mining 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 MC Mining 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 MC Mining i.e., MC Mining and AngloGold Ashanti go up and down completely randomly.

Pair Corralation between MC Mining and AngloGold Ashanti

Assuming the 90 days trading horizon MC Mining is expected to under-perform the AngloGold Ashanti. In addition to that, MC Mining is 3.06 times more volatile than AngloGold Ashanti. It trades about -0.03 of its total potential returns per unit of risk. AngloGold Ashanti is currently generating about 0.28 per unit of volatility. If you would invest  4,224,139  in AngloGold Ashanti on December 22, 2024 and sell it today you would earn a total of  2,398,061  from holding AngloGold Ashanti or generate 56.77% return on investment over 90 days.

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

MC Mining  vs.  AngloGold Ashanti

MC Mining

Risk-Adjusted Performance

Very Weak

Over the last 90 days MC Mining has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady 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.

AngloGold Ashanti

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in AngloGold Ashanti are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, AngloGold Ashanti exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with MC Mining and AngloGold Ashanti

The main advantage of trading using opposite MC Mining and AngloGold Ashanti positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MC Mining 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 MC Mining 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.

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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.