Correlation Between ANGLO AMERICAN and Anglesey Mining

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

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

Diversification Opportunities for ANGLO AMERICAN and Anglesey Mining

-0.37

Correlation Coefficient

ANGLO AMERICAN  Anglesey Mining

Very good diversification

The 3 months correlation between ANGLO and Anglesey is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding ANGLO AMERICAN SPADR and Anglesey Mining plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anglesey Mining plc and ANGLO AMERICAN 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 ANGLO AMERICAN SPADR are associated (or correlated) with Anglesey Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anglesey Mining plc has no effect on the direction of ANGLO AMERICAN i.e., ANGLO AMERICAN and Anglesey Mining go up and down completely randomly.

Pair Corralation between ANGLO AMERICAN and Anglesey Mining

Assuming the 90 days trading horizon ANGLO AMERICAN is expected to generate 55.21 times less return on investment than Anglesey Mining. But when comparing it to its historical volatility, ANGLO AMERICAN SPADR is 35.98 times less risky than Anglesey Mining. It trades about 0.07 of its potential returns per unit of risk. Anglesey Mining plc is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  0.30  in Anglesey Mining plc on April 22, 2025 and sell it today you would lose (0.25) from holding Anglesey Mining plc or give up 83.33% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

ANGLO AMERICAN SPADR  vs.  Anglesey Mining plc

ANGLO AMERICAN SPADR

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in ANGLO AMERICAN SPADR are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile essential indicators, ANGLO AMERICAN reported solid returns over the last few months and may actually be approaching a breakup point.

Anglesey Mining plc

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Anglesey Mining plc are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Anglesey Mining reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ANGLO AMERICAN and Anglesey Mining

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

The idea behind ANGLO AMERICAN SPADR and Anglesey Mining 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.