Correlation Between Aclara Resources and Greenfire Resources
Can any of the company-specific risk be diversified away by investing in both Aclara Resources and Greenfire Resources 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 Aclara Resources and Greenfire Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aclara Resources and Greenfire Resources, you can compare the effects of market volatilities on Aclara Resources and Greenfire Resources 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 Aclara Resources with a short position of Greenfire Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aclara Resources and Greenfire Resources.
Diversification Opportunities for Aclara Resources and Greenfire Resources
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aclara and Greenfire is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Aclara Resources and Greenfire Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greenfire Resources and Aclara 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 Aclara Resources are associated (or correlated) with Greenfire Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greenfire Resources has no effect on the direction of Aclara Resources i.e., Aclara Resources and Greenfire Resources go up and down completely randomly.
Pair Corralation between Aclara Resources and Greenfire Resources
Assuming the 90 days trading horizon Aclara Resources is expected to under-perform the Greenfire Resources. In addition to that, Aclara Resources is 1.02 times more volatile than Greenfire Resources. It trades about -0.05 of its total potential returns per unit of risk. Greenfire Resources is currently generating about 0.07 per unit of volatility. If you would invest 789.00 in Greenfire Resources on September 3, 2024 and sell it today you would earn a total of 233.00 from holding Greenfire Resources or generate 29.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aclara Resources vs. Greenfire Resources
Performance |
| Timeline |
| Aclara Resources |
| Greenfire Resources |
Aclara Resources and Greenfire Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aclara Resources and Greenfire Resources
The main advantage of trading using opposite Aclara Resources and Greenfire Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aclara Resources position performs unexpectedly, Greenfire Resources 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 Greenfire Resources will offset losses from the drop in Greenfire Resources' long position.The idea behind Aclara Resources and Greenfire Resources pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Greenfire Resources vs. Canadian Natural Resources | Greenfire Resources vs. Tourmaline Oil Corp | Greenfire Resources vs. Ovintiv | Greenfire Resources vs. ARC Resources |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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