Correlation Between AMREP and First Resources

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

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

Diversification Opportunities for AMREP and First Resources

0.0

Correlation Coefficient

AMREP  First Resources

Pay attention - limited upside

The 3 months correlation between AMREP and First is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding AMREP and First Resources Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Resources and AMREP 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 AMREP are associated (or correlated) with First Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Resources has no effect on the direction of AMREP i.e., AMREP and First Resources go up and down completely randomly.

Pair Corralation between AMREP and First Resources

If you would invest (100.00) in First Resources Ltd on February 23, 2024 and sell it today you would earn a total of  100.00  from holding First Resources Ltd or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

AMREP  vs.  First Resources Ltd

AMREP

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AMREP has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, AMREP is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

First Resources

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in First Resources Ltd are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong fundamental indicators, First Resources is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with AMREP and First Resources

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

The idea behind AMREP and First Resources Ltd 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.