Correlation Between Athabasca Oil and Eco (Atlantic)
Can any of the company-specific risk be diversified away by investing in both Athabasca Oil and Eco (Atlantic) 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 Eco (Atlantic) 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 Eco Oil Gas, you can compare the effects of market volatilities on Athabasca Oil and Eco (Atlantic) 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 Eco (Atlantic). Check out your portfolio center. Please also check ongoing floating volatility patterns of Athabasca Oil and Eco (Atlantic).
Diversification Opportunities for Athabasca Oil and Eco (Atlantic)
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Athabasca and Eco is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Athabasca Oil Corp and Eco Oil Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eco (Atlantic) 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 Eco (Atlantic). Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eco (Atlantic) has no effect on the direction of Athabasca Oil i.e., Athabasca Oil and Eco (Atlantic) go up and down completely randomly.
Pair Corralation between Athabasca Oil and Eco (Atlantic)
Assuming the 90 days horizon Athabasca Oil is expected to generate 1.04 times less return on investment than Eco (Atlantic). But when comparing it to its historical volatility, Athabasca Oil Corp is 3.25 times less risky than Eco (Atlantic). It trades about 0.08 of its potential returns per unit of risk. Eco Oil Gas is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 24.00 in Eco Oil Gas on August 30, 2024 and sell it today you would lose (12.00) from holding Eco Oil Gas or give up 50.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Athabasca Oil Corp vs. Eco Oil Gas
Performance |
| Timeline |
| Athabasca Oil Corp |
| Eco (Atlantic) |
Athabasca Oil and Eco (Atlantic) Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Athabasca Oil and Eco (Atlantic)
The main advantage of trading using opposite Athabasca Oil and Eco (Atlantic) positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Athabasca Oil position performs unexpectedly, Eco (Atlantic) 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 Eco (Atlantic) will offset losses from the drop in Eco (Atlantic)'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 |
| Eco (Atlantic) vs. CGX Energy | Eco (Atlantic) vs. Frontera Energy Corp | Eco (Atlantic) vs. Africa Energy Corp | Eco (Atlantic) vs. Africa Oil Corp |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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