Correlation Between Athabasca Oil and CGX Energy
Can any of the company-specific risk be diversified away by investing in both Athabasca Oil and CGX Energy 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 Athabasca Oil and CGX Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Athabasca Oil Corp and CGX Energy, you can compare the effects of market volatilities on Athabasca Oil and CGX Energy 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 Athabasca Oil with a short position of CGX Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Athabasca Oil and CGX Energy.
Diversification Opportunities for Athabasca Oil and CGX Energy
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Athabasca and CGX is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Athabasca Oil Corp and CGX Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CGX Energy and Athabasca Oil 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 Athabasca Oil Corp are associated (or correlated) with CGX Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CGX Energy has no effect on the direction of Athabasca Oil i.e., Athabasca Oil and CGX Energy go up and down completely randomly.
Pair Corralation between Athabasca Oil and CGX Energy
Assuming the 90 days horizon Athabasca Oil Corp is expected to generate 0.44 times more return on investment than CGX Energy. However, Athabasca Oil Corp is 2.28 times less risky than CGX Energy. It trades about 0.08 of its potential returns per unit of risk. CGX Energy is currently generating about -0.03 per unit of risk. If you would invest 166.00 in Athabasca Oil Corp on August 30, 2024 and sell it today you would earn a total of 203.00 from holding Athabasca Oil Corp or generate 122.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Athabasca Oil Corp vs. CGX Energy
Performance |
| Timeline |
| Athabasca Oil Corp |
| CGX Energy |
Athabasca Oil and CGX Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Athabasca Oil and CGX Energy
The main advantage of trading using opposite Athabasca Oil and CGX Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Athabasca Oil position performs unexpectedly, CGX Energy 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 CGX Energy will offset losses from the drop in CGX Energy's long position.| Athabasca Oil vs. Yamaha Motor Co | Athabasca Oil vs. Nitto Denko Corp | Athabasca Oil vs. Farmers Merchants Bancorp | Athabasca Oil vs. Furukawa Electric Co |
| CGX Energy vs. Yamaha Motor Co | CGX Energy vs. Nitto Denko Corp | CGX Energy vs. Farmers Merchants Bancorp | CGX Energy vs. Furukawa Electric Co |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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