Correlation Between Anfield Resources and Appia Energy
Can any of the company-specific risk be diversified away by investing in both Anfield Resources and Appia 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 Appia 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 Appia Energy Corp, you can compare the effects of market volatilities on Anfield Resources and Appia 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 Appia Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anfield Resources and Appia Energy.
Diversification Opportunities for Anfield Resources and Appia Energy
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Anfield and Appia is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Anfield Resources and Appia Energy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Appia 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 Appia Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Appia Energy Corp has no effect on the direction of Anfield Resources i.e., Anfield Resources and Appia Energy go up and down completely randomly.
Pair Corralation between Anfield Resources and Appia Energy
Assuming the 90 days horizon Anfield Resources is expected to generate 0.96 times more return on investment than Appia Energy. However, Anfield Resources is 1.04 times less risky than Appia Energy. It trades about -0.04 of its potential returns per unit of risk. Appia Energy Corp is currently generating about -0.14 per unit of risk. If you would invest 9.00 in Anfield Resources on August 29, 2024 and sell it today you would lose (1.00) from holding Anfield Resources or give up 11.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Anfield Resources vs. Appia Energy Corp
Performance |
| Timeline |
| Anfield Resources |
| Appia Energy Corp |
Anfield Resources and Appia Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anfield Resources and Appia Energy
The main advantage of trading using opposite Anfield Resources and Appia Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anfield Resources position performs unexpectedly, Appia 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 Appia Energy will offset losses from the drop in Appia Energy's long position.| Anfield Resources vs. Petroleo Brasileiro Petrobras | Anfield Resources vs. Equinor ASA ADR | Anfield Resources vs. Eni SpA ADR | Anfield Resources vs. YPF Sociedad Anonima |
| Appia Energy vs. Anfield Resources | Appia Energy vs. Purepoint Uranium Group | Appia Energy vs. Bannerman Resources | Appia Energy vs. Standard Uranium |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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