Correlation Between Alaska Energy and Urbana
Can any of the company-specific risk be diversified away by investing in both Alaska Energy and Urbana 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 Alaska Energy and Urbana into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alaska Energy Metals and Urbana, you can compare the effects of market volatilities on Alaska Energy and Urbana 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 Alaska Energy with a short position of Urbana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alaska Energy and Urbana.
Diversification Opportunities for Alaska Energy and Urbana
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Alaska and Urbana is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Alaska Energy Metals and Urbana in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Urbana and Alaska Energy 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 Alaska Energy Metals are associated (or correlated) with Urbana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Urbana has no effect on the direction of Alaska Energy i.e., Alaska Energy and Urbana go up and down completely randomly.
Pair Corralation between Alaska Energy and Urbana
Assuming the 90 days trading horizon Alaska Energy Metals is expected to under-perform the Urbana. In addition to that, Alaska Energy is 3.92 times more volatile than Urbana. It trades about -0.16 of its total potential returns per unit of risk. Urbana is currently generating about -0.1 per unit of volatility. If you would invest 619.00 in Urbana on December 1, 2024 and sell it today you would lose (19.00) from holding Urbana or give up 3.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alaska Energy Metals vs. Urbana
Performance |
| Timeline |
| Alaska Energy Metals |
| Urbana |
Alaska Energy and Urbana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alaska Energy and Urbana
The main advantage of trading using opposite Alaska Energy and Urbana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alaska Energy position performs unexpectedly, Urbana 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 Urbana will offset losses from the drop in Urbana's long position.| Alaska Energy vs. CNJ Capital Investments | Alaska Energy vs. Canadian General Investments | Alaska Energy vs. Solid Impact Investments | Alaska Energy vs. High Liner Foods |
| Urbana vs. Urbana | Urbana vs. Uniteds Limited | Urbana vs. Accord Financial Corp | Urbana vs. Clairvest Group |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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