Correlation Between Altura Energy and Foothills Exploration
Can any of the company-specific risk be diversified away by investing in both Altura Energy and Foothills Exploration 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 Altura Energy and Foothills Exploration into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Altura Energy and Foothills Exploration, you can compare the effects of market volatilities on Altura Energy and Foothills Exploration 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 Altura Energy with a short position of Foothills Exploration. Check out your portfolio center. Please also check ongoing floating volatility patterns of Altura Energy and Foothills Exploration.
Diversification Opportunities for Altura Energy and Foothills Exploration
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Altura and Foothills is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Altura Energy and Foothills Exploration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Foothills Exploration and Altura Energy 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 Altura Energy are associated (or correlated) with Foothills Exploration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Foothills Exploration has no effect on the direction of Altura Energy i.e., Altura Energy and Foothills Exploration go up and down completely randomly.
Pair Corralation between Altura Energy and Foothills Exploration
Assuming the 90 days horizon Altura Energy is expected to generate 6.22 times less return on investment than Foothills Exploration. But when comparing it to its historical volatility, Altura Energy is 5.6 times less risky than Foothills Exploration. It trades about 0.1 of its potential returns per unit of risk. Foothills Exploration is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 0.03 in Foothills Exploration on August 31, 2024 and sell it today you would lose (0.02) from holding Foothills Exploration or give up 66.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Altura Energy vs. Foothills Exploration
Performance |
| Timeline |
| Altura Energy |
| Foothills Exploration |
Altura Energy and Foothills Exploration Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Altura Energy and Foothills Exploration
The main advantage of trading using opposite Altura Energy and Foothills Exploration positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Altura Energy position performs unexpectedly, Foothills Exploration 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 Foothills Exploration will offset losses from the drop in Foothills Exploration's long position.| Altura Energy vs. AER Energy Resources | Altura Energy vs. Alamo Energy Corp | Altura Energy vs. Arete Industries | Altura Energy vs. Barrister Energy LLC |
| Foothills Exploration vs. Permian Resources | Foothills Exploration vs. Devon Energy | Foothills Exploration vs. EOG Resources | Foothills Exploration vs. Coterra Energy |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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