Correlation Between SilverCrest Metals and AngloGold Ashanti
Can any of the company-specific risk be diversified away by investing in both SilverCrest Metals 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 SilverCrest Metals and AngloGold Ashanti into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SilverCrest Metals and AngloGold Ashanti plc, you can compare the effects of market volatilities on SilverCrest Metals 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 SilverCrest Metals with a short position of AngloGold Ashanti. Check out your portfolio center. Please also check ongoing floating volatility patterns of SilverCrest Metals and AngloGold Ashanti.
Diversification Opportunities for SilverCrest Metals and AngloGold Ashanti
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SilverCrest and AngloGold is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding SilverCrest Metals 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 SilverCrest Metals 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 SilverCrest Metals 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 SilverCrest Metals i.e., SilverCrest Metals and AngloGold Ashanti go up and down completely randomly.
Pair Corralation between SilverCrest Metals and AngloGold Ashanti
Given the investment horizon of 90 days SilverCrest Metals is expected to generate 1.39 times more return on investment than AngloGold Ashanti. However, SilverCrest Metals is 1.39 times more volatile than AngloGold Ashanti plc. It trades about -0.01 of its potential returns per unit of risk. AngloGold Ashanti plc is currently generating about -0.09 per unit of risk. If you would invest 979.00 in SilverCrest Metals on September 25, 2024 and sell it today you would lose (62.00) from holding SilverCrest Metals or give up 6.33% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
SilverCrest Metals vs. AngloGold Ashanti plc
Performance |
Timeline |
SilverCrest Metals |
AngloGold Ashanti plc |
SilverCrest Metals and AngloGold Ashanti Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with SilverCrest Metals and AngloGold Ashanti
The main advantage of trading using opposite SilverCrest Metals and AngloGold Ashanti positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SilverCrest Metals 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.SilverCrest Metals vs. AngloGold Ashanti plc | SilverCrest Metals vs. Harmony Gold Mining | SilverCrest Metals vs. Eldorado Gold Corp | SilverCrest Metals vs. Kinross Gold |
AngloGold Ashanti vs. Harmony Gold Mining | AngloGold Ashanti vs. Eldorado Gold Corp | AngloGold Ashanti vs. Kinross Gold | AngloGold Ashanti vs. Pan American Silver |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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