Correlation Between Athabasca Oil and Whitecap Resources
Can any of the company-specific risk be diversified away by investing in both Athabasca Oil and Whitecap 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 Whitecap 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 Whitecap Resources, you can compare the effects of market volatilities on Athabasca Oil and Whitecap 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 Whitecap Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Athabasca Oil and Whitecap Resources.
Diversification Opportunities for Athabasca Oil and Whitecap Resources
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Athabasca and Whitecap is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Athabasca Oil Corp and Whitecap Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Whitecap 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 Whitecap Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Whitecap Resources has no effect on the direction of Athabasca Oil i.e., Athabasca Oil and Whitecap Resources go up and down completely randomly.
Pair Corralation between Athabasca Oil and Whitecap Resources
Assuming the 90 days horizon Athabasca Oil Corp is expected to under-perform the Whitecap Resources. In addition to that, Athabasca Oil is 1.3 times more volatile than Whitecap Resources. It trades about -0.32 of its total potential returns per unit of risk. Whitecap Resources is currently generating about -0.26 per unit of volatility. If you would invest 716.00 in Whitecap Resources on November 3, 2024 and sell it today you would lose (58.00) from holding Whitecap Resources or give up 8.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Athabasca Oil Corp vs. Whitecap Resources
Performance |
| Timeline |
| Athabasca Oil Corp |
| Whitecap Resources |
Athabasca Oil and Whitecap Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Athabasca Oil and Whitecap Resources
The main advantage of trading using opposite Athabasca Oil and Whitecap Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Athabasca Oil position performs unexpectedly, Whitecap 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 Whitecap Resources will offset losses from the drop in Whitecap 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 |
| Whitecap Resources vs. Agnico Eagle Mines | Whitecap Resources vs. Osisko Gold Ro | Whitecap Resources vs. Gold Fields Ltd | Whitecap Resources vs. AngloGold Ashanti plc |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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