Correlation Between Eastfield Resources and Amarc Resources

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

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

Diversification Opportunities for Eastfield Resources and Amarc Resources

-0.16

Correlation Coefficient

Eastfield Resources  Amarc Resources

Good diversification

The 3 months correlation between Eastfield and Amarc is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Eastfield Resources and Amarc Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amarc Resources and Eastfield 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 Eastfield Resources are associated (or correlated) with Amarc Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amarc Resources has no effect on the direction of Eastfield Resources i.e., Eastfield Resources and Amarc Resources go up and down completely randomly.

Pair Corralation between Eastfield Resources and Amarc Resources

If you would invest  20.00  in Amarc Resources on September 20, 2024 and sell it today you would earn a total of  0.00  from holding Amarc Resources or generate 0.0% return on investment over 90 days.

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

Eastfield Resources  vs.  Amarc Resources

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 fairly stable basic indicators, Eastfield Resources is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Amarc Resources

Risk-Adjusted Performance

4 of 100

Insignificant

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.

Pair Trading with Eastfield Resources and Amarc Resources

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

The idea behind Eastfield Resources and Amarc 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.