Correlation Between Anglo American and Aftermath Silver

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

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

Diversification Opportunities for Anglo American and Aftermath Silver

0.38

Correlation Coefficient

Anglo American  Aftermath Silver

Weak diversification

The 3 months correlation between Anglo and Aftermath is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Anglo American PLC and Aftermath Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aftermath Silver and Anglo American 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 Anglo American PLC are associated (or correlated) with Aftermath Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aftermath Silver has no effect on the direction of Anglo American i.e., Anglo American and Aftermath Silver go up and down completely randomly.

Pair Corralation between Anglo American and Aftermath Silver

Assuming the 90 days horizon Anglo American PLC is expected to under-perform the Aftermath Silver. But the otc stock apears to be less risky and, when comparing its historical volatility, Anglo American PLC is 4.27 times less risky than Aftermath Silver. The otc stock trades about -0.31 of its potential returns per unit of risk. The Aftermath Silver is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  34.00  in Aftermath Silver on October 10, 2024 and sell it today you would lose (1.00) from holding Aftermath Silver or give up 2.94% of portfolio value over 90 days.

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

Anglo American PLC  vs.  Aftermath Silver

Anglo American PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Anglo American PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Anglo American is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Aftermath Silver

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Aftermath Silver are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Aftermath Silver may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Anglo American and Aftermath Silver

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

The idea behind Anglo American PLC and Aftermath Silver 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.