Correlation Between Anfield Resources and EnCore Energy

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

By analyzing existing cross correlation between Anfield Resources and enCore Energy Corp, you can compare the effects of market volatilities on Anfield Resources and EnCore Energy 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 EnCore Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anfield Resources and EnCore Energy.

Diversification Opportunities for Anfield Resources and EnCore Energy

0.58

Correlation Coefficient

Anfield Resources  EnCore Energy

Very weak diversification

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

Pair Corralation between Anfield Resources and EnCore Energy

Assuming the 90 days horizon Anfield Resources is expected to generate 2.23 times more return on investment than EnCore Energy. However, Anfield Resources is 2.23 times more volatile than enCore Energy Corp. It trades about 0.07 of its potential returns per unit of risk. enCore Energy Corp is currently generating about 0.0 per unit of risk. If you would invest  7.00  in Anfield Resources on September 4, 2024 and sell it today you would earn a total of  5.00  from holding Anfield Resources or generate 71.43% return on investment over 90 days.

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

Anfield Resources  vs.  enCore Energy Corp

Anfield Resources

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Anfield Resources are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Anfield Resources showed solid returns over the last few months and may actually be approaching a breakup point.

enCore Energy Corp

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in enCore Energy Corp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, EnCore Energy showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Anfield Resources and EnCore Energy

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

The idea behind Anfield Resources and enCore Energy Corp 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.