Correlation Between ARC Resources and Headwater Exploration
Can any of the company-specific risk be diversified away by investing in both ARC Resources and Headwater 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 ARC Resources and Headwater Exploration into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ARC Resources and Headwater Exploration, you can compare the effects of market volatilities on ARC Resources and Headwater 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 ARC Resources with a short position of Headwater Exploration. Check out your portfolio center. Please also check ongoing floating volatility patterns of ARC Resources and Headwater Exploration.
Diversification Opportunities for ARC Resources and Headwater Exploration
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ARC and Headwater is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding ARC Resources and Headwater Exploration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Headwater Exploration and ARC 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 ARC Resources are associated (or correlated) with Headwater Exploration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Headwater Exploration has no effect on the direction of ARC Resources i.e., ARC Resources and Headwater Exploration go up and down completely randomly.
Pair Corralation between ARC Resources and Headwater Exploration
If you would invest (100.00) in ARC Resources on January 13, 2025 and sell it today you would earn a total of 100.00 from holding ARC Resources 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 |
ARC Resources vs. Headwater Exploration
Performance |
| Timeline |
| ARC Resources |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
| Headwater Exploration |
ARC Resources and Headwater Exploration Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ARC Resources and Headwater Exploration
The main advantage of trading using opposite ARC Resources and Headwater Exploration positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ARC Resources position performs unexpectedly, Headwater 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 Headwater Exploration will offset losses from the drop in Headwater Exploration's long position.| ARC Resources vs. Freehold Royalties | ARC Resources vs. Capricorn Energy PLC | ARC Resources vs. Laredo Oil | ARC Resources vs. Athabasca Oil Corp |
| Headwater Exploration vs. Cathedral Energy Services | Headwater Exploration vs. Vantage Drilling International | Headwater Exploration vs. Seadrill Limited | Headwater Exploration vs. Noble plc |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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