Correlation Between PACIFIC ONLINE and Anfield Resources

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

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

Diversification Opportunities for PACIFIC ONLINE and Anfield Resources

0.0

Correlation Coefficient

PACIFIC ONLINE  Anfield Resources

Pay attention - limited upside

The 3 months correlation between PACIFIC and Anfield is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding PACIFIC ONLINE and Anfield Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anfield Resources and PACIFIC ONLINE 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 PACIFIC ONLINE are associated (or correlated) with Anfield Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anfield Resources has no effect on the direction of PACIFIC ONLINE i.e., PACIFIC ONLINE and Anfield Resources go up and down completely randomly.

Pair Corralation between PACIFIC ONLINE and Anfield Resources

If you would invest  3.60  in Anfield Resources on September 28, 2024 and sell it today you would earn a total of  1.05  from holding Anfield Resources or generate 29.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

PACIFIC ONLINE  vs.  Anfield Resources

PACIFIC ONLINE

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PACIFIC ONLINE has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, PACIFIC ONLINE is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Anfield Resources

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Anfield Resources are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady fundamental indicators, Anfield Resources reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PACIFIC ONLINE and Anfield Resources

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

The idea behind PACIFIC ONLINE and Anfield Resources 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.