Correlation Between Peninsula Energy and Anfield Resources
Can any of the company-specific risk be diversified away by investing in both Peninsula Energy 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 Peninsula Energy and Anfield Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Peninsula Energy and Anfield Resources, you can compare the effects of market volatilities on Peninsula Energy 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 Peninsula Energy with a short position of Anfield Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Peninsula Energy and Anfield Resources.
Diversification Opportunities for Peninsula Energy and Anfield Resources
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Peninsula and Anfield is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Peninsula Energy and Anfield Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anfield Resources and Peninsula Energy 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 Peninsula Energy 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 Peninsula Energy i.e., Peninsula Energy and Anfield Resources go up and down completely randomly.
Pair Corralation between Peninsula Energy and Anfield Resources
Assuming the 90 days horizon Peninsula Energy is expected to generate 7.23 times more return on investment than Anfield Resources. However, Peninsula Energy is 7.23 times more volatile than Anfield Resources. It trades about 0.06 of its potential returns per unit of risk. Anfield Resources is currently generating about 0.06 per unit of risk. If you would invest 7.50 in Peninsula Energy on September 1, 2024 and sell it today you would earn a total of 71.50 from holding Peninsula Energy or generate 953.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.88% |
| Values | Daily Returns |
Peninsula Energy vs. Anfield Resources
Performance |
| Timeline |
| Peninsula Energy |
| Anfield Resources |
Peninsula Energy and Anfield Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Peninsula Energy and Anfield Resources
The main advantage of trading using opposite Peninsula Energy and Anfield Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Peninsula Energy 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.| Peninsula Energy vs. Deep Yellow | Peninsula Energy vs. Baselode Energy Corp | Peninsula Energy vs. Paladin Energy | Peninsula Energy vs. Elevate Uranium |
| Anfield Resources vs. Petroleo Brasileiro Petrobras | Anfield Resources vs. Equinor ASA ADR | Anfield Resources vs. Eni SpA ADR | Anfield Resources vs. YPF Sociedad Anonima |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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