Correlation Between ANGLOGOLD ASHANTI and GUINNESS GHANA

Can any of the company-specific risk be diversified away by investing in both ANGLOGOLD ASHANTI and GUINNESS GHANA 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 ANGLOGOLD ASHANTI and GUINNESS GHANA into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ANGLOGOLD ASHANTI LIMITED and GUINNESS GHANA BREWERIES, you can compare the effects of market volatilities on ANGLOGOLD ASHANTI and GUINNESS GHANA 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 ANGLOGOLD ASHANTI with a short position of GUINNESS GHANA. Check out your portfolio center. Please also check ongoing floating volatility patterns of ANGLOGOLD ASHANTI and GUINNESS GHANA.

Diversification Opportunities for ANGLOGOLD ASHANTI and GUINNESS GHANA

0.0

Correlation Coefficient

ANGLOGOLD ASHANTI  GUINNESS GHANA

Pay attention - limited upside

The 3 months correlation between ANGLOGOLD and GUINNESS is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding ANGLOGOLD ASHANTI LIMITED and GUINNESS GHANA BREWERIES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GUINNESS GHANA BREWERIES and ANGLOGOLD ASHANTI 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 ANGLOGOLD ASHANTI LIMITED are associated (or correlated) with GUINNESS GHANA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GUINNESS GHANA BREWERIES has no effect on the direction of ANGLOGOLD ASHANTI i.e., ANGLOGOLD ASHANTI and GUINNESS GHANA go up and down completely randomly.

Pair Corralation between ANGLOGOLD ASHANTI and GUINNESS GHANA

If you would invest  3,700  in ANGLOGOLD ASHANTI LIMITED on September 13, 2024 and sell it today you would earn a total of  0.00  from holding ANGLOGOLD ASHANTI LIMITED or generate 0.0% return on investment over 90 days.

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

ANGLOGOLD ASHANTI LIMITED  vs.  GUINNESS GHANA BREWERIES

ANGLOGOLD ASHANTI

Risk-Adjusted Performance

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Very Weak

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

GUINNESS GHANA BREWERIES

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GUINNESS GHANA BREWERIES has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak 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.

Pair Trading with ANGLOGOLD ASHANTI and GUINNESS GHANA

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

The idea behind ANGLOGOLD ASHANTI LIMITED and GUINNESS GHANA BREWERIES 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.