Correlation Between Infrastrutture Wireless and Antofagasta PLC

Can any of the company-specific risk be diversified away by investing in both Infrastrutture Wireless and Antofagasta PLC 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 Infrastrutture Wireless and Antofagasta PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Infrastrutture Wireless and Antofagasta PLC

0.88

Correlation Coefficient

Infrastrutture Wireless  Antofagasta PLC

Very poor diversification

The 3 months correlation between Infrastrutture and Antofagasta is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Infrastrutture Wireless Italia and Antofagasta PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Antofagasta PLC and Infrastrutture Wireless 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 Infrastrutture Wireless Italiane are associated (or correlated) with Antofagasta PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Antofagasta PLC has no effect on the direction of Infrastrutture Wireless i.e., Infrastrutture Wireless and Antofagasta PLC go up and down completely randomly.

Pair Corralation between Infrastrutture Wireless and Antofagasta PLC

Assuming the 90 days trading horizon Infrastrutture Wireless Italiane is expected to generate 0.44 times more return on investment than Antofagasta PLC. However, Infrastrutture Wireless Italiane is 2.25 times less risky than Antofagasta PLC. It trades about 0.02 of its potential returns per unit of risk. Antofagasta PLC is currently generating about -0.08 per unit of risk. If you would invest  961.00  in Infrastrutture Wireless Italiane on September 24, 2024 and sell it today you would earn a total of  2.00  from holding Infrastrutture Wireless Italiane or generate 0.21% return on investment over 90 days.

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

Infrastrutture Wireless Italia  vs.  Antofagasta PLC

Infrastrutture Wireless

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Infrastrutture Wireless Italiane has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Antofagasta PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Antofagasta PLC 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 basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Infrastrutture Wireless and Antofagasta PLC

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

The idea behind Infrastrutture Wireless Italiane and Antofagasta PLC 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 Commodity Directory module to find actively traded commodities issued by global exchanges.