Correlation Between ARC Resources and Horizon Oil
Can any of the company-specific risk be diversified away by investing in both ARC Resources and Horizon Oil 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 Horizon Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ARC Resources and Horizon Oil Limited, you can compare the effects of market volatilities on ARC Resources and Horizon Oil 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 Horizon Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of ARC Resources and Horizon Oil.
Diversification Opportunities for ARC Resources and Horizon Oil
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between ARC and Horizon is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding ARC Resources and Horizon Oil Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Horizon Oil Limited 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 Horizon Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Horizon Oil Limited has no effect on the direction of ARC Resources i.e., ARC Resources and Horizon Oil go up and down completely randomly.
Pair Corralation between ARC Resources and Horizon Oil
If you would invest 11.00 in Horizon Oil Limited on September 1, 2024 and sell it today you would earn a total of 2.00 from holding Horizon Oil Limited or generate 18.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.8% |
| Values | Daily Returns |
ARC Resources vs. Horizon Oil Limited
Performance |
| Timeline |
| ARC Resources |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Horizon Oil Limited |
ARC Resources and Horizon Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ARC Resources and Horizon Oil
The main advantage of trading using opposite ARC Resources and Horizon Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ARC Resources position performs unexpectedly, Horizon Oil 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 Horizon Oil will offset losses from the drop in Horizon Oil'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 |
| Horizon Oil vs. Dno ASA | Horizon Oil vs. PetroShale | Horizon Oil vs. Enwell Energy plc | Horizon Oil vs. Tullow Oil 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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