Correlation Between Anfield Resources and ValOre Metals

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

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

Diversification Opportunities for Anfield Resources and ValOre Metals

0.63

Correlation Coefficient

Anfield Resources  ValOre Metals

Poor diversification

The 3 months correlation between Anfield and ValOre is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Anfield Resources and ValOre Metals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ValOre Metals 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 ValOre Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ValOre Metals Corp has no effect on the direction of Anfield Resources i.e., Anfield Resources and ValOre Metals go up and down completely randomly.

Pair Corralation between Anfield Resources and ValOre Metals

Assuming the 90 days horizon Anfield Resources is expected to generate 1.01 times less return on investment than ValOre Metals. In addition to that, Anfield Resources is 1.05 times more volatile than ValOre Metals Corp. It trades about 0.05 of its total potential returns per unit of risk. ValOre Metals Corp is currently generating about 0.05 per unit of volatility. If you would invest  4.29  in ValOre Metals Corp on September 15, 2024 and sell it today you would earn a total of  1.84  from holding ValOre Metals Corp or generate 42.89% return on investment over 90 days.

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

Anfield Resources  vs.  ValOre Metals Corp

Anfield Resources

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Anfield Resources are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak fundamental indicators, Anfield Resources reported solid returns over the last few months and may actually be approaching a breakup point.

ValOre Metals Corp

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ValOre Metals Corp are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, ValOre Metals reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Anfield Resources and ValOre Metals

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

The idea behind Anfield Resources and ValOre Metals 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.

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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.