Correlation Between Athabasca Oil and Frontera Energy
Can any of the company-specific risk be diversified away by investing in both Athabasca Oil and Frontera 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 Frontera 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 Frontera Energy Corp, you can compare the effects of market volatilities on Athabasca Oil and Frontera 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 Frontera Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Athabasca Oil and Frontera Energy.
Diversification Opportunities for Athabasca Oil and Frontera Energy
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Athabasca and Frontera is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Athabasca Oil Corp and Frontera Energy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Frontera Energy Corp 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 Frontera Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Frontera Energy Corp has no effect on the direction of Athabasca Oil i.e., Athabasca Oil and Frontera Energy go up and down completely randomly.
Pair Corralation between Athabasca Oil and Frontera Energy
Assuming the 90 days horizon Athabasca Oil Corp is expected to under-perform the Frontera Energy. But the pink sheet apears to be less risky and, when comparing its historical volatility, Athabasca Oil Corp is 1.01 times less risky than Frontera Energy. The pink sheet trades about -0.32 of its potential returns per unit of risk. The Frontera Energy Corp is currently generating about -0.28 of returns per unit of risk over similar time horizon. If you would invest 631.00 in Frontera Energy Corp on November 3, 2024 and sell it today you would lose (70.00) from holding Frontera Energy Corp or give up 11.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Athabasca Oil Corp vs. Frontera Energy Corp
Performance |
| Timeline |
| Athabasca Oil Corp |
| Frontera Energy Corp |
Athabasca Oil and Frontera Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Athabasca Oil and Frontera Energy
The main advantage of trading using opposite Athabasca Oil and Frontera Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Athabasca Oil position performs unexpectedly, Frontera 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 Frontera Energy will offset losses from the drop in Frontera Energy's long position.| Athabasca Oil vs. Pine Cliff Energy | Athabasca Oil vs. Cardinal Energy | Athabasca Oil vs. Tamarack Valley Energy | Athabasca Oil vs. Saturn Oil Gas |
| Frontera Energy vs. CGX Energy | Frontera Energy vs. Athabasca Oil Corp | Frontera Energy vs. Africa Oil Corp | Frontera Energy vs. MEG Energy 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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