Correlation Between Affiliated Resources and Metals Creek

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

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

Diversification Opportunities for Affiliated Resources and Metals Creek

-0.6

Correlation Coefficient

Affiliated Resources  Metals Creek

Excellent diversification

The 3 months correlation between Affiliated and Metals is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Affiliated Resources Corp and Metals Creek Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metals Creek Resources and Affiliated 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 Affiliated Resources Corp are associated (or correlated) with Metals Creek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metals Creek Resources has no effect on the direction of Affiliated Resources i.e., Affiliated Resources and Metals Creek go up and down completely randomly.

Pair Corralation between Affiliated Resources and Metals Creek

Given the investment horizon of 90 days Affiliated Resources Corp is expected to under-perform the Metals Creek. But the pink sheet apears to be less risky and, when comparing its historical volatility, Affiliated Resources Corp is 2.96 times less risky than Metals Creek. The pink sheet trades about -0.03 of its potential returns per unit of risk. The Metals Creek Resources is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  1.00  in Metals Creek Resources on September 3, 2024 and sell it today you would earn a total of  2.00  from holding Metals Creek Resources or generate 200.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.46%
Values	Daily Returns

Affiliated Resources Corp  vs.  Metals Creek Resources

Affiliated Resources Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Affiliated Resources Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's technical and fundamental indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Metals Creek Resources

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Metals Creek Resources are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Metals Creek reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Affiliated Resources and Metals Creek

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

The idea behind Affiliated Resources Corp and Metals Creek Resources 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.