Correlation Between Avanti Energy and Kelt Exploration
Can any of the company-specific risk be diversified away by investing in both Avanti Energy 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 Avanti Energy and Kelt Exploration into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Avanti Energy and Kelt Exploration, you can compare the effects of market volatilities on Avanti Energy 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 Avanti Energy with a short position of Kelt Exploration. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avanti Energy and Kelt Exploration.
Diversification Opportunities for Avanti Energy and Kelt Exploration
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Avanti and Kelt is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Avanti Energy and Kelt Exploration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kelt Exploration and Avanti Energy 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 Avanti Energy 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 Avanti Energy i.e., Avanti Energy and Kelt Exploration go up and down completely randomly.
Pair Corralation between Avanti Energy and Kelt Exploration
Assuming the 90 days horizon Avanti Energy is expected to generate 3.88 times more return on investment than Kelt Exploration. However, Avanti Energy is 3.88 times more volatile than Kelt Exploration. It trades about 0.11 of its potential returns per unit of risk. Kelt Exploration is currently generating about -0.16 per unit of risk. If you would invest 7.40 in Avanti Energy on November 27, 2024 and sell it today you would earn a total of 1.10 from holding Avanti Energy or generate 14.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Avanti Energy vs. Kelt Exploration
Performance |
| Timeline |
| Avanti Energy |
| Kelt Exploration |
Avanti Energy and Kelt Exploration Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Avanti Energy and Kelt Exploration
The main advantage of trading using opposite Avanti Energy and Kelt Exploration positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avanti Energy 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.| Avanti Energy vs. Desert Mountain Energy | Avanti Energy vs. Avanti Energy | Avanti Energy vs. Royal Helium | Avanti Energy vs. Total Helium |
| 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
Other Complementary Tools
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Global Correlations Find global opportunities by holding instruments from different markets |