Correlation Between Anfield Resources and Peninsula Energy
Can any of the company-specific risk be diversified away by investing in both Anfield Resources and Peninsula 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 Peninsula 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 Peninsula Energy, you can compare the effects of market volatilities on Anfield Resources and Peninsula 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 Peninsula Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anfield Resources and Peninsula Energy.
Diversification Opportunities for Anfield Resources and Peninsula Energy
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Anfield and Peninsula is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Anfield Resources and Peninsula Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peninsula Energy 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 Peninsula Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peninsula Energy has no effect on the direction of Anfield Resources i.e., Anfield Resources and Peninsula Energy go up and down completely randomly.
Pair Corralation between Anfield Resources and Peninsula Energy
Assuming the 90 days horizon Anfield Resources is expected to generate 1.57 times more return on investment than Peninsula Energy. However, Anfield Resources is 1.57 times more volatile than Peninsula Energy. It trades about 0.03 of its potential returns per unit of risk. Peninsula Energy is currently generating about -0.27 per unit of risk. If you would invest 5.00 in Anfield Resources on November 27, 2024 and sell it today you would lose (0.23) from holding Anfield Resources or give up 4.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Anfield Resources vs. Peninsula Energy
Performance |
| Timeline |
| Anfield Resources |
| Peninsula Energy |
Anfield Resources and Peninsula Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anfield Resources and Peninsula Energy
The main advantage of trading using opposite Anfield Resources and Peninsula Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anfield Resources position performs unexpectedly, Peninsula 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 Peninsula Energy will offset losses from the drop in Peninsula Energy's long position.| Anfield Resources vs. Aura Energy Limited | Anfield Resources vs. Standard Uranium | Anfield Resources vs. Baselode Energy Corp | Anfield Resources vs. Alligator Energy Limited |
| Peninsula Energy vs. Deep Yellow | Peninsula Energy vs. Baselode Energy Corp | Peninsula Energy vs. Paladin Energy | Peninsula Energy vs. Elevate 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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