Correlation Between Alimentation Couchen and InPlay Oil
Can any of the company-specific risk be diversified away by investing in both Alimentation Couchen and InPlay 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 Alimentation Couchen and InPlay Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alimentation Couchen Tard and InPlay Oil Corp, you can compare the effects of market volatilities on Alimentation Couchen and InPlay 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 Alimentation Couchen with a short position of InPlay Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alimentation Couchen and InPlay Oil.
Diversification Opportunities for Alimentation Couchen and InPlay Oil
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Alimentation and InPlay is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Alimentation Couchen Tard and InPlay Oil Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InPlay Oil Corp and Alimentation Couchen 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 Alimentation Couchen Tard are associated (or correlated) with InPlay Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of InPlay Oil Corp has no effect on the direction of Alimentation Couchen i.e., Alimentation Couchen and InPlay Oil go up and down completely randomly.
Pair Corralation between Alimentation Couchen and InPlay Oil
Assuming the 90 days trading horizon Alimentation Couchen Tard is expected to under-perform the InPlay Oil. But the stock apears to be less risky and, when comparing its historical volatility, Alimentation Couchen Tard is 1.93 times less risky than InPlay Oil. The stock trades about -0.18 of its potential returns per unit of risk. The InPlay Oil Corp is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 177.00 in InPlay Oil Corp on November 2, 2024 and sell it today you would lose (8.00) from holding InPlay Oil Corp or give up 4.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alimentation Couchen Tard vs. InPlay Oil Corp
Performance |
| Timeline |
| Alimentation Couchen Tard |
| InPlay Oil Corp |
Alimentation Couchen and InPlay Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alimentation Couchen and InPlay Oil
The main advantage of trading using opposite Alimentation Couchen and InPlay Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alimentation Couchen position performs unexpectedly, InPlay 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 InPlay Oil will offset losses from the drop in InPlay Oil's long position.| Alimentation Couchen vs. Metro Inc | Alimentation Couchen vs. Dollarama | Alimentation Couchen vs. Nutrien | Alimentation Couchen vs. Canadian Pacific Railway |
| InPlay Oil vs. Gear Energy | InPlay Oil vs. Journey Energy | InPlay Oil vs. Yangarra Resources | InPlay Oil vs. Obsidian 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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