Correlation Between AER Energy and Foothills Exploration
Can any of the company-specific risk be diversified away by investing in both AER Energy and Foothills 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 AER Energy and Foothills Exploration into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AER Energy Resources and Foothills Exploration, you can compare the effects of market volatilities on AER Energy and Foothills 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 AER Energy with a short position of Foothills Exploration. Check out your portfolio center. Please also check ongoing floating volatility patterns of AER Energy and Foothills Exploration.
Diversification Opportunities for AER Energy and Foothills Exploration
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between AER and Foothills is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding AER Energy Resources and Foothills Exploration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Foothills Exploration and AER 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 AER Energy Resources are associated (or correlated) with Foothills Exploration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Foothills Exploration has no effect on the direction of AER Energy i.e., AER Energy and Foothills Exploration go up and down completely randomly.
Pair Corralation between AER Energy and Foothills Exploration
Given the investment horizon of 90 days AER Energy Resources is expected to generate 2.23 times more return on investment than Foothills Exploration. However, AER Energy is 2.23 times more volatile than Foothills Exploration. It trades about 0.06 of its potential returns per unit of risk. Foothills Exploration is currently generating about 0.11 per unit of risk. If you would invest 0.00 in AER Energy Resources on August 31, 2024 and sell it today you would earn a total of 0.01 from holding AER Energy Resources or generate 9.223372036854776E16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
AER Energy Resources vs. Foothills Exploration
Performance |
| Timeline |
| AER Energy Resources |
| Foothills Exploration |
AER Energy and Foothills Exploration Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AER Energy and Foothills Exploration
The main advantage of trading using opposite AER Energy and Foothills Exploration positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AER Energy position performs unexpectedly, Foothills 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 Foothills Exploration will offset losses from the drop in Foothills Exploration's long position.| AER Energy vs. Caduceus Software Systems | AER Energy vs. North Springs Resources | AER Energy vs. Nyxio Tech Corp | AER Energy vs. Access Power Co |
| Foothills Exploration vs. Permian Resources | Foothills Exploration vs. Devon Energy | Foothills Exploration vs. EOG Resources | Foothills Exploration vs. Coterra Energy |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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