Correlation Between Fortune Bay and Anfield Resources

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

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

Diversification Opportunities for Fortune Bay and Anfield Resources

0.26

Correlation Coefficient

Fortune Bay  Anfield Resources

Modest diversification

The 3 months correlation between Fortune and Anfield is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Fortune Bay Corp and Anfield Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anfield Resources and Fortune Bay 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 Fortune Bay Corp 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 Fortune Bay i.e., Fortune Bay and Anfield Resources go up and down completely randomly.

Pair Corralation between Fortune Bay and Anfield Resources

Assuming the 90 days horizon Fortune Bay Corp is expected to under-perform the Anfield Resources. But the stock apears to be less risky and, when comparing its historical volatility, Fortune Bay Corp is 1.66 times less risky than Anfield Resources. The stock trades about -0.06 of its potential returns per unit of risk. The Anfield Resources is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  10.00  in Anfield Resources on October 6, 2024 and sell it today you would lose (1.00) from holding Anfield Resources or give up 10.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Fortune Bay Corp  vs.  Anfield Resources

Fortune Bay Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fortune Bay Corp 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 February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Anfield Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Anfield Resources has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Anfield Resources is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Fortune Bay and Anfield Resources

The main advantage of trading using opposite Fortune Bay and Anfield Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fortune Bay 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.

The idea behind Fortune Bay Corp and Anfield 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.