Correlation Between AngloGold Ashanti and Visa
Can any of the company-specific risk be diversified away by investing in both AngloGold Ashanti and Visa 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 Visa 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 Visa Class A, you can compare the effects of market volatilities on AngloGold Ashanti and Visa 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 Visa. Check out your portfolio center. Please also check ongoing floating volatility patterns of AngloGold Ashanti and Visa.
Diversification Opportunities for AngloGold Ashanti and Visa
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between AngloGold and Visa is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding AngloGold Ashanti plc and Visa Class A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Visa Class A 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 Visa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Visa Class A has no effect on the direction of AngloGold Ashanti i.e., AngloGold Ashanti and Visa go up and down completely randomly.
Pair Corralation between AngloGold Ashanti and Visa
Allowing for the 90-day total investment horizon AngloGold Ashanti plc is expected to generate 2.46 times more return on investment than Visa. However, AngloGold Ashanti is 2.46 times more volatile than Visa Class A. It trades about 0.27 of its potential returns per unit of risk. Visa Class A is currently generating about -0.38 per unit of risk. If you would invest 2,127 in AngloGold Ashanti plc on January 20, 2024 and sell it today you would earn a total of 244.00 from holding AngloGold Ashanti plc or generate 11.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
AngloGold Ashanti plc vs. Visa Class A
Performance |
| Timeline |
| AngloGold Ashanti plc |
| Visa Class A |
AngloGold Ashanti and Visa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AngloGold Ashanti and Visa
The main advantage of trading using opposite AngloGold Ashanti and Visa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AngloGold Ashanti position performs unexpectedly, Visa 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 Visa will offset losses from the drop in Visa's long position.| AngloGold Ashanti vs. Harmony Gold Mining | AngloGold Ashanti vs. Eldorado Gold Corp | AngloGold Ashanti vs. Kinross Gold | AngloGold Ashanti vs. Pan American Silver |
| Visa vs. American Express | Visa vs. Capital One Financial | Visa vs. Upstart HoldingsInc | Visa vs. Ally Financial |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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