Correlation Between Affiliated Resources and Athabasca Oil
Can any of the company-specific risk be diversified away by investing in both Affiliated Resources and Athabasca 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 Affiliated Resources and Athabasca Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Affiliated Resources Corp and Athabasca Oil Corp, you can compare the effects of market volatilities on Affiliated Resources and Athabasca 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 Affiliated Resources with a short position of Athabasca Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Affiliated Resources and Athabasca Oil.
Diversification Opportunities for Affiliated Resources and Athabasca Oil
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Affiliated and Athabasca is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Affiliated Resources Corp and Athabasca Oil Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Athabasca Oil Corp and Affiliated 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 Affiliated Resources Corp are associated (or correlated) with Athabasca Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Athabasca Oil Corp has no effect on the direction of Affiliated Resources i.e., Affiliated Resources and Athabasca Oil go up and down completely randomly.
Pair Corralation between Affiliated Resources and Athabasca Oil
Given the investment horizon of 90 days Affiliated Resources Corp is expected to generate 6.04 times more return on investment than Athabasca Oil. However, Affiliated Resources is 6.04 times more volatile than Athabasca Oil Corp. It trades about 0.13 of its potential returns per unit of risk. Athabasca Oil Corp is currently generating about 0.03 per unit of risk. If you would invest 0.66 in Affiliated Resources Corp on November 3, 2024 and sell it today you would earn a total of 5.30 from holding Affiliated Resources Corp or generate 803.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.8% |
| Values | Daily Returns |
Affiliated Resources Corp vs. Athabasca Oil Corp
Performance |
| Timeline |
| Affiliated Resources Corp |
| Athabasca Oil Corp |
Affiliated Resources and Athabasca Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Affiliated Resources and Athabasca Oil
The main advantage of trading using opposite Affiliated Resources and Athabasca Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Affiliated Resources position performs unexpectedly, Athabasca 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 Athabasca Oil will offset losses from the drop in Athabasca Oil's long position.| Affiliated Resources vs. Philip Morris International | Affiliated Resources vs. CDW Corp | Affiliated Resources vs. LB Foster | Affiliated Resources vs. Vita Coco |
| Athabasca Oil vs. Pine Cliff Energy | Athabasca Oil vs. Cardinal Energy | Athabasca Oil vs. Tamarack Valley Energy | Athabasca Oil vs. Saturn Oil Gas |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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