Correlation Between ARC Resources and Kelt Exploration
Can any of the company-specific risk be diversified away by investing in both ARC Resources and Kelt 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 Kelt 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 Kelt Exploration, you can compare the effects of market volatilities on ARC Resources and Kelt 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 Kelt Exploration. Check out your portfolio center. Please also check ongoing floating volatility patterns of ARC Resources and Kelt Exploration.
Diversification Opportunities for ARC Resources and Kelt Exploration
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ARC and Kelt is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding ARC Resources and Kelt Exploration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kelt 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 Kelt Exploration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kelt Exploration has no effect on the direction of ARC Resources i.e., ARC Resources and Kelt Exploration go up and down completely randomly.
Pair Corralation between ARC Resources and Kelt Exploration
If you would invest 462.00 in Kelt Exploration on September 1, 2024 and sell it today you would earn a total of 38.00 from holding Kelt Exploration or generate 8.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.53% |
| Values | Daily Returns |
ARC Resources vs. Kelt Exploration
Performance |
| Timeline |
| ARC Resources |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Kelt Exploration |
ARC Resources and Kelt Exploration Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ARC Resources and Kelt Exploration
The main advantage of trading using opposite ARC Resources and Kelt Exploration positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ARC Resources position performs unexpectedly, Kelt 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 Kelt Exploration will offset losses from the drop in Kelt 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 |
| Kelt Exploration vs. ROK Resources | Kelt Exploration vs. PetroShale | Kelt Exploration vs. Pieridae Energy Limited | Kelt Exploration vs. Bengal 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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