Correlation Between Affiliated Resources and Surge Battery

Can any of the company-specific risk be diversified away by investing in both Affiliated Resources and Surge Battery 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 Surge Battery 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 Surge Battery Metals, you can compare the effects of market volatilities on Affiliated Resources and Surge Battery 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 Surge Battery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Affiliated Resources and Surge Battery.

Diversification Opportunities for Affiliated Resources and Surge Battery

0.23

Correlation Coefficient

Affiliated Resources  Surge Battery

Modest diversification

The 3 months correlation between Affiliated and Surge is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Affiliated Resources Corp and Surge Battery Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Surge Battery Metals 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 Surge Battery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Surge Battery Metals has no effect on the direction of Affiliated Resources i.e., Affiliated Resources and Surge Battery go up and down completely randomly.

Pair Corralation between Affiliated Resources and Surge Battery

Given the investment horizon of 90 days Affiliated Resources Corp is expected to generate 3.0 times more return on investment than Surge Battery. However, Affiliated Resources is 3.0 times more volatile than Surge Battery Metals. It trades about 0.1 of its potential returns per unit of risk. Surge Battery Metals is currently generating about 0.04 per unit of risk. If you would invest  5.10  in Affiliated Resources Corp on December 30, 2024 and sell it today you would earn a total of  1.90  from holding Affiliated Resources Corp or generate 37.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	96.88%
Values	Daily Returns

Affiliated Resources Corp  vs.  Surge Battery Metals

Affiliated Resources Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Affiliated Resources Corp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite uncertain technical and fundamental indicators, Affiliated Resources disclosed solid returns over the last few months and may actually be approaching a breakup point.

Surge Battery Metals

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Surge Battery Metals are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile forward indicators, Surge Battery may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Affiliated Resources and Surge Battery

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

The idea behind Affiliated Resources Corp and Surge Battery Metals 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.