Correlation Between Zeder Investments and AngloGold Ashanti

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

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

Diversification Opportunities for Zeder Investments and AngloGold Ashanti

-0.31

Correlation Coefficient

Zeder Investments  AngloGold Ashanti

Very good diversification

The 3 months correlation between Zeder and AngloGold is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Zeder Investments and AngloGold Ashanti in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AngloGold Ashanti and Zeder Investments 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 Zeder Investments 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 Zeder Investments i.e., Zeder Investments and AngloGold Ashanti go up and down completely randomly.

Pair Corralation between Zeder Investments and AngloGold Ashanti

Assuming the 90 days trading horizon Zeder Investments is expected to under-perform the AngloGold Ashanti. But the stock apears to be less risky and, when comparing its historical volatility, Zeder Investments is 1.4 times less risky than AngloGold Ashanti. The stock trades about -0.02 of its potential returns per unit of risk. The AngloGold Ashanti is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest  4,147,047  in AngloGold Ashanti on December 30, 2024 and sell it today you would earn a total of  2,689,753  from holding AngloGold Ashanti or generate 64.86% return on investment over 90 days.

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

Zeder Investments  vs.  AngloGold Ashanti

Zeder Investments

Risk-Adjusted Performance

Very Weak

Over the last 90 days Zeder Investments has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Zeder Investments is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the 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 23 (%) 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 Zeder Investments and AngloGold Ashanti

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

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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.