Correlation Between Amarc Resources and Eastfield Resources

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

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

Diversification Opportunities for Amarc Resources and Eastfield Resources

-0.2

Correlation Coefficient

Amarc Resources  Eastfield Resources

Good diversification

The 3 months correlation between Amarc and Eastfield is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Amarc Resources and Eastfield Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastfield Resources and Amarc 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 Amarc Resources are associated (or correlated) with Eastfield Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastfield Resources has no effect on the direction of Amarc Resources i.e., Amarc Resources and Eastfield Resources go up and down completely randomly.

Pair Corralation between Amarc Resources and Eastfield Resources

If you would invest  20.00  in Amarc Resources on September 24, 2024 and sell it today you would earn a total of  1.00  from holding Amarc Resources or generate 5.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Amarc Resources  vs.  Eastfield Resources

Amarc Resources

Risk-Adjusted Performance

4 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Amarc Resources are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Amarc Resources showed solid returns over the last few months and may actually be approaching a breakup point.

Eastfield Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Eastfield Resources has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Amarc Resources and Eastfield Resources

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

The idea behind Amarc Resources and Eastfield 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.

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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.