Correlation Between Anfield Resources and JSC National

Can any of the company-specific risk be diversified away by investing in both Anfield Resources and JSC National 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 Anfield Resources and JSC National into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Anfield Resources and JSC National Atomic, you can compare the effects of market volatilities on Anfield Resources and JSC National 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 Anfield Resources with a short position of JSC National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anfield Resources and JSC National.

Diversification Opportunities for Anfield Resources and JSC National

0.58

Correlation Coefficient

Anfield Resources  JSC National

Very weak diversification

The 3 months correlation between Anfield and JSC is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Anfield Resources and JSC National Atomic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JSC National Atomic and Anfield Resources 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 Anfield Resources are associated (or correlated) with JSC National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JSC National Atomic has no effect on the direction of Anfield Resources i.e., Anfield Resources and JSC National go up and down completely randomly.

Pair Corralation between Anfield Resources and JSC National

Assuming the 90 days trading horizon Anfield Resources is expected to generate 6.18 times more return on investment than JSC National. However, Anfield Resources is 6.18 times more volatile than JSC National Atomic. It trades about 0.06 of its potential returns per unit of risk. JSC National Atomic is currently generating about -0.01 per unit of risk. If you would invest  5.00  in Anfield Resources on September 19, 2024 and sell it today you would lose (0.20) from holding Anfield Resources or give up 4.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Anfield Resources  vs.  JSC National Atomic

Anfield Resources

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Anfield Resources are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental indicators, Anfield Resources reported solid returns over the last few months and may actually be approaching a breakup point.

JSC National Atomic

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in JSC National Atomic are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, JSC National may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Anfield Resources and JSC National

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

The idea behind Anfield Resources and JSC National Atomic 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.