Correlation Between Anglo Eastern and Capital Drilling
Can any of the company-specific risk be diversified away by investing in both Anglo Eastern and Capital Drilling 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 Eastern and Capital Drilling into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Anglo Eastern Plantations PLC and Capital Drilling, you can compare the effects of market volatilities on Anglo Eastern and Capital Drilling 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 Eastern with a short position of Capital Drilling. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anglo Eastern and Capital Drilling.
Diversification Opportunities for Anglo Eastern and Capital Drilling
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Anglo and Capital is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Anglo Eastern Plantations PLC and Capital Drilling in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital Drilling and Anglo Eastern 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 Eastern Plantations PLC are associated (or correlated) with Capital Drilling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital Drilling has no effect on the direction of Anglo Eastern i.e., Anglo Eastern and Capital Drilling go up and down completely randomly.
Pair Corralation between Anglo Eastern and Capital Drilling
Assuming the 90 days trading horizon Anglo Eastern is expected to generate 1.32 times less return on investment than Capital Drilling. But when comparing it to its historical volatility, Anglo Eastern Plantations PLC is 1.15 times less risky than Capital Drilling. It trades about 0.12 of its potential returns per unit of risk. Capital Drilling is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 9,100 in Capital Drilling on August 31, 2025 and sell it today you would earn a total of 2,200 from holding Capital Drilling or generate 24.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Anglo Eastern Plantations PLC vs. Capital Drilling
Performance |
| Timeline |
| Anglo Eastern Planta |
| Capital Drilling |
Anglo Eastern and Capital Drilling Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anglo Eastern and Capital Drilling
The main advantage of trading using opposite Anglo Eastern and Capital Drilling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anglo Eastern position performs unexpectedly, Capital Drilling 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 Capital Drilling will offset losses from the drop in Capital Drilling's long position.| Anglo Eastern vs. Ecclesiastical Insurance Office | Anglo Eastern vs. Pets at Home | Anglo Eastern vs. Dentsply Sirona | Anglo Eastern vs. Impax Asset Management |
| Capital Drilling vs. Various Eateries PLC | Capital Drilling vs. Host Hotels Resorts | Capital Drilling vs. Micron Technology | Capital Drilling vs. Polar Capital Technology |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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