Correlation Between Athabasca Oil and ROK Resources
Can any of the company-specific risk be diversified away by investing in both Athabasca Oil and ROK Resources 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 ROK Resources 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 ROK Resources, you can compare the effects of market volatilities on Athabasca Oil and ROK Resources 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 ROK Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Athabasca Oil and ROK Resources.
Diversification Opportunities for Athabasca Oil and ROK Resources
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Athabasca and ROK is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Athabasca Oil Corp and ROK Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ROK Resources 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 ROK Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ROK Resources has no effect on the direction of Athabasca Oil i.e., Athabasca Oil and ROK Resources go up and down completely randomly.
Pair Corralation between Athabasca Oil and ROK Resources
Assuming the 90 days horizon Athabasca Oil Corp is expected to generate 0.44 times more return on investment than ROK Resources. However, Athabasca Oil Corp is 2.27 times less risky than ROK Resources. It trades about -0.32 of its potential returns per unit of risk. ROK Resources is currently generating about -0.16 per unit of risk. If you would invest 383.00 in Athabasca Oil Corp on November 3, 2024 and sell it today you would lose (48.00) from holding Athabasca Oil Corp or give up 12.53% 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. ROK Resources
Performance |
| Timeline |
| Athabasca Oil Corp |
| ROK Resources |
Athabasca Oil and ROK Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Athabasca Oil and ROK Resources
The main advantage of trading using opposite Athabasca Oil and ROK Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Athabasca Oil position performs unexpectedly, ROK Resources 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 ROK Resources will offset losses from the drop in ROK Resources' 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 |
| ROK Resources vs. Legacy Education | ROK Resources vs. Apple Inc | ROK Resources vs. Microsoft | ROK Resources vs. NVIDIA |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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