Correlation Between RESMINING UNSPADR10 and ANGLO ASIAN

Can any of the company-specific risk be diversified away by investing in both RESMINING UNSPADR10 and ANGLO ASIAN 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 RESMINING UNSPADR10 and ANGLO ASIAN into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between RESMINING UNSPADR10 and ANGLO ASIAN MINING, you can compare the effects of market volatilities on RESMINING UNSPADR10 and ANGLO ASIAN 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 RESMINING UNSPADR10 with a short position of ANGLO ASIAN. Check out your portfolio center. Please also check ongoing floating volatility patterns of RESMINING UNSPADR10 and ANGLO ASIAN.

Diversification Opportunities for RESMINING UNSPADR10 and ANGLO ASIAN

0.67

Correlation Coefficient

RESMINING UNSPADR10  ANGLO ASIAN

Poor diversification

The 3 months correlation between RESMINING and ANGLO is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding RESMINING UNSPADR10 and ANGLO ASIAN MINING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANGLO ASIAN MINING and RESMINING UNSPADR10 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 RESMINING UNSPADR10 are associated (or correlated) with ANGLO ASIAN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANGLO ASIAN MINING has no effect on the direction of RESMINING UNSPADR10 i.e., RESMINING UNSPADR10 and ANGLO ASIAN go up and down completely randomly.

Pair Corralation between RESMINING UNSPADR10 and ANGLO ASIAN

Assuming the 90 days trading horizon RESMINING UNSPADR10 is expected to generate 1.26 times less return on investment than ANGLO ASIAN. In addition to that, RESMINING UNSPADR10 is 1.06 times more volatile than ANGLO ASIAN MINING. It trades about 0.23 of its total potential returns per unit of risk. ANGLO ASIAN MINING is currently generating about 0.31 per unit of volatility. If you would invest  155.00  in ANGLO ASIAN MINING on March 21, 2025 and sell it today you would earn a total of  38.00  from holding ANGLO ASIAN MINING or generate 24.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.65%
Values	Daily Returns

RESMINING UNSPADR10  vs.  ANGLO ASIAN MINING

RESMINING UNSPADR10

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in RESMINING UNSPADR10 are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak primary indicators, RESMINING UNSPADR10 reported solid returns over the last few months and may actually be approaching a breakup point.

ANGLO ASIAN MINING

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ANGLO ASIAN MINING are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, ANGLO ASIAN exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with RESMINING UNSPADR10 and ANGLO ASIAN

The main advantage of trading using opposite RESMINING UNSPADR10 and ANGLO ASIAN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RESMINING UNSPADR10 position performs unexpectedly, ANGLO ASIAN 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 ANGLO ASIAN will offset losses from the drop in ANGLO ASIAN's long position.

The idea behind RESMINING UNSPADR10 and ANGLO ASIAN MINING 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.