Correlation Between Aldebaran Resources and Huntsman Exploration
Can any of the company-specific risk be diversified away by investing in both Aldebaran Resources and Huntsman Exploration 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 Aldebaran Resources and Huntsman Exploration into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aldebaran Resources and Huntsman Exploration, you can compare the effects of market volatilities on Aldebaran Resources and Huntsman Exploration 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 Aldebaran Resources with a short position of Huntsman Exploration. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aldebaran Resources and Huntsman Exploration.
Diversification Opportunities for Aldebaran Resources and Huntsman Exploration
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aldebaran and Huntsman is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Aldebaran Resources and Huntsman Exploration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huntsman Exploration and Aldebaran 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 Aldebaran Resources are associated (or correlated) with Huntsman Exploration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huntsman Exploration has no effect on the direction of Aldebaran Resources i.e., Aldebaran Resources and Huntsman Exploration go up and down completely randomly.
Pair Corralation between Aldebaran Resources and Huntsman Exploration
Assuming the 90 days horizon Aldebaran Resources is expected to under-perform the Huntsman Exploration. But the otc stock apears to be less risky and, when comparing its historical volatility, Aldebaran Resources is 10.4 times less risky than Huntsman Exploration. The otc stock trades about -0.2 of its potential returns per unit of risk. The Huntsman Exploration is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 2.60 in Huntsman Exploration on November 3, 2024 and sell it today you would earn a total of 1.00 from holding Huntsman Exploration or generate 38.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Aldebaran Resources vs. Huntsman Exploration
Performance |
| Timeline |
| Aldebaran Resources |
| Huntsman Exploration |
Aldebaran Resources and Huntsman Exploration Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aldebaran Resources and Huntsman Exploration
The main advantage of trading using opposite Aldebaran Resources and Huntsman Exploration positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aldebaran Resources position performs unexpectedly, Huntsman Exploration 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 Huntsman Exploration will offset losses from the drop in Huntsman Exploration's long position.| Aldebaran Resources vs. Huntsman Exploration | Aldebaran Resources vs. Aurelia Metals Limited | Aldebaran Resources vs. Adriatic Metals PLC | Aldebaran Resources vs. American Helium |
| Huntsman Exploration vs. Aurelia Metals Limited | Huntsman Exploration vs. Adriatic Metals PLC | Huntsman Exploration vs. American Helium | Huntsman Exploration vs. Progressive Planet Solutions |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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