Correlation Between Hycroft Mining and AngloGold Ashanti

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

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

Diversification Opportunities for Hycroft Mining and AngloGold Ashanti

0.22

Correlation Coefficient

Hycroft Mining  AngloGold Ashanti

Modest diversification

The 3 months correlation between Hycroft and AngloGold is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Hycroft Mining Holding and AngloGold Ashanti plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AngloGold Ashanti plc and Hycroft Mining 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 Hycroft Mining Holding 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 plc has no effect on the direction of Hycroft Mining i.e., Hycroft Mining and AngloGold Ashanti go up and down completely randomly.

Pair Corralation between Hycroft Mining and AngloGold Ashanti

Assuming the 90 days horizon Hycroft Mining Holding is expected to generate 5.46 times more return on investment than AngloGold Ashanti. However, Hycroft Mining is 5.46 times more volatile than AngloGold Ashanti plc. It trades about 0.05 of its potential returns per unit of risk. AngloGold Ashanti plc is currently generating about 0.04 per unit of risk. If you would invest  6.20  in Hycroft Mining Holding on September 12, 2024 and sell it today you would lose (4.83) from holding Hycroft Mining Holding or give up 77.9% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.79%
Values	Daily Returns

Hycroft Mining Holding  vs.  AngloGold Ashanti plc

Hycroft Mining Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hycroft Mining Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly abnormal fundamental indicators, Hycroft Mining may actually be approaching a critical reversion point that can send shares even higher in January 2025.

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 comparatively stable basic indicators, AngloGold Ashanti is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Hycroft Mining and AngloGold Ashanti

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

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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.