Correlation Between RCL Foods and AngloGold Ashanti
Can any of the company-specific risk be diversified away by investing in both RCL Foods 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 RCL Foods and AngloGold Ashanti into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RCL Foods and AngloGold Ashanti, you can compare the effects of market volatilities on RCL Foods 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 RCL Foods with a short position of AngloGold Ashanti. Check out your portfolio center. Please also check ongoing floating volatility patterns of RCL Foods and AngloGold Ashanti.
Diversification Opportunities for RCL Foods and AngloGold Ashanti
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between RCL and AngloGold is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding RCL Foods and AngloGold Ashanti in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AngloGold Ashanti and RCL Foods 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 RCL Foods 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 RCL Foods i.e., RCL Foods and AngloGold Ashanti go up and down completely randomly.
Pair Corralation between RCL Foods and AngloGold Ashanti
Assuming the 90 days trading horizon RCL Foods is expected to generate 1.11 times more return on investment than AngloGold Ashanti. However, RCL Foods is 1.11 times more volatile than AngloGold Ashanti. It trades about 0.19 of its potential returns per unit of risk. AngloGold Ashanti is currently generating about -0.06 per unit of risk. If you would invest 92,700 in RCL Foods on December 4, 2024 and sell it today you would earn a total of 13,200 from holding RCL Foods or generate 14.24% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 95.45% |
Values | Daily Returns |
RCL Foods vs. AngloGold Ashanti
Performance |
Timeline |
RCL Foods |
AngloGold Ashanti |
RCL Foods and AngloGold Ashanti Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with RCL Foods and AngloGold Ashanti
The main advantage of trading using opposite RCL Foods and AngloGold Ashanti positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RCL Foods 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.RCL Foods vs. Safari Investments RSA | RCL Foods vs. Harmony Gold Mining | RCL Foods vs. MC Mining | RCL Foods vs. Lesaka Technologies |
AngloGold Ashanti vs. Brimstone Investment | AngloGold Ashanti vs. RCL Foods | AngloGold Ashanti vs. Nedbank Group | AngloGold Ashanti vs. Safari Investments RSA |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
Other Complementary Tools
Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites |