Correlation Between Alamos Gold and AngloGold Ashanti

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Can any of the company-specific risk be diversified away by investing in both Alamos Gold 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 Alamos Gold and AngloGold Ashanti into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alamos Gold and AngloGold Ashanti Plc, you can compare the effects of market volatilities on Alamos Gold 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 Alamos Gold with a short position of AngloGold Ashanti. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alamos Gold and AngloGold Ashanti.

Diversification Opportunities for Alamos Gold and AngloGold Ashanti

0.73
  Correlation Coefficient

Poor diversification

The 3 months correlation between Alamos and AngloGold is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Alamos Gold 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 Alamos Gold 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 Alamos Gold 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 Alamos Gold i.e., Alamos Gold and AngloGold Ashanti go up and down completely randomly.

Pair Corralation between Alamos Gold and AngloGold Ashanti

Considering the 90-day investment horizon Alamos Gold is expected to generate 0.77 times more return on investment than AngloGold Ashanti. However, Alamos Gold is 1.3 times less risky than AngloGold Ashanti. It trades about 0.47 of its potential returns per unit of risk. AngloGold Ashanti Plc is currently generating about 0.3 per unit of risk. If you would invest  1,149  in Alamos Gold on December 29, 2023 and sell it today you would earn a total of  306.00  from holding Alamos Gold or generate 26.63% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Alamos Gold  vs.  AngloGold Ashanti Plc

 Performance 
       Timeline  
Alamos Gold 

Risk-Adjusted Performance

5 of 100

 
Low
 
High
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Alamos Gold are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady technical and fundamental indicators, Alamos Gold may actually be approaching a critical reversion point that can send shares even higher in April 2024.
AngloGold Ashanti Plc 

Risk-Adjusted Performance

8 of 100

 
Low
 
High
OK
Compared to the overall equity markets, risk-adjusted returns on investments in AngloGold Ashanti Plc are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, AngloGold Ashanti unveiled solid returns over the last few months and may actually be approaching a breakup point.

Alamos Gold and AngloGold Ashanti Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Alamos Gold and AngloGold Ashanti

The main advantage of trading using opposite Alamos Gold and AngloGold Ashanti positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alamos Gold 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 Alamos Gold 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.

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