Correlation Between Advantage Oil and Birchcliff Energy
Can any of the company-specific risk be diversified away by investing in both Advantage Oil and Birchcliff Energy 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 Advantage Oil and Birchcliff Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Advantage Oil Gas and Birchcliff Energy, you can compare the effects of market volatilities on Advantage Oil and Birchcliff Energy 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 Advantage Oil with a short position of Birchcliff Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advantage Oil and Birchcliff Energy.
Diversification Opportunities for Advantage Oil and Birchcliff Energy
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Advantage and Birchcliff is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Advantage Oil Gas and Birchcliff Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Birchcliff Energy and Advantage Oil 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 Advantage Oil Gas are associated (or correlated) with Birchcliff Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Birchcliff Energy has no effect on the direction of Advantage Oil i.e., Advantage Oil and Birchcliff Energy go up and down completely randomly.
Pair Corralation between Advantage Oil and Birchcliff Energy
Assuming the 90 days trading horizon Advantage Oil Gas is expected to generate 1.12 times more return on investment than Birchcliff Energy. However, Advantage Oil is 1.12 times more volatile than Birchcliff Energy. It trades about 0.01 of its potential returns per unit of risk. Birchcliff Energy is currently generating about 0.0 per unit of risk. If you would invest 890.00 in Advantage Oil Gas on August 28, 2024 and sell it today you would earn a total of 0.00 from holding Advantage Oil Gas or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Advantage Oil Gas vs. Birchcliff Energy
Performance |
| Timeline |
| Advantage Oil Gas |
| Birchcliff Energy |
Advantage Oil and Birchcliff Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advantage Oil and Birchcliff Energy
The main advantage of trading using opposite Advantage Oil and Birchcliff Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advantage Oil position performs unexpectedly, Birchcliff Energy 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 Birchcliff Energy will offset losses from the drop in Birchcliff Energy's long position.| Advantage Oil vs. Birchcliff Energy | Advantage Oil vs. NuVista Energy | Advantage Oil vs. Kelt Exploration | Advantage Oil vs. Peyto ExplorationDevelopment Corp |
| Birchcliff Energy vs. Yangarra Resources | Birchcliff Energy vs. iShares Canadian HYBrid | Birchcliff Energy vs. Altagas Cum Red | Birchcliff Energy vs. European Residential Real |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Transaction History View history of all your transactions and understand their impact on performance |