Correlation Between AngloGold Ashanti and Inno Holdings

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

By analyzing existing cross correlation between AngloGold Ashanti plc and Inno Holdings Common, you can compare the effects of market volatilities on AngloGold Ashanti and Inno Holdings 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 Inno Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of AngloGold Ashanti and Inno Holdings.

Diversification Opportunities for AngloGold Ashanti and Inno Holdings

-0.15

Correlation Coefficient

AngloGold Ashanti  Inno Holdings

Good diversification

The 3 months correlation between AngloGold and Inno is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding AngloGold Ashanti plc and Inno Holdings Common in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inno Holdings Common 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 plc are associated (or correlated) with Inno Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inno Holdings Common has no effect on the direction of AngloGold Ashanti i.e., AngloGold Ashanti and Inno Holdings go up and down completely randomly.

Pair Corralation between AngloGold Ashanti and Inno Holdings

Allowing for the 90-day total investment horizon AngloGold Ashanti plc is expected to under-perform the Inno Holdings. But the stock apears to be less risky and, when comparing its historical volatility, AngloGold Ashanti plc is 4.45 times less risky than Inno Holdings. The stock trades about -0.08 of its potential returns per unit of risk. The Inno Holdings Common is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  400.00  in Inno Holdings Common on September 2, 2024 and sell it today you would earn a total of  91.00  from holding Inno Holdings Common or generate 22.75% return on investment over 90 days.

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

AngloGold Ashanti plc  vs.  Inno Holdings Common

AngloGold Ashanti plc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AngloGold Ashanti plc 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.

Inno Holdings Common

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Inno Holdings Common are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical indicators, Inno Holdings exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AngloGold Ashanti and Inno Holdings

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

The idea behind AngloGold Ashanti plc and Inno Holdings Common 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.