Correlation Between AXP Energy and Altura Energy
Can any of the company-specific risk be diversified away by investing in both AXP Energy and Altura 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 AXP Energy and Altura Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AXP Energy and Altura Energy, you can compare the effects of market volatilities on AXP Energy and Altura 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 AXP Energy with a short position of Altura Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of AXP Energy and Altura Energy.
Diversification Opportunities for AXP Energy and Altura Energy
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AXP and Altura is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding AXP Energy and Altura Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altura Energy and AXP 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 AXP Energy are associated (or correlated) with Altura Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altura Energy has no effect on the direction of AXP Energy i.e., AXP Energy and Altura Energy go up and down completely randomly.
Pair Corralation between AXP Energy and Altura Energy
Assuming the 90 days horizon AXP Energy is expected to generate 3.43 times more return on investment than Altura Energy. However, AXP Energy is 3.43 times more volatile than Altura Energy. It trades about 0.07 of its potential returns per unit of risk. Altura Energy is currently generating about 0.1 per unit of risk. If you would invest 0.14 in AXP Energy on October 24, 2024 and sell it today you would lose (0.01) from holding AXP Energy or give up 7.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.74% |
| Values | Daily Returns |
AXP Energy vs. Altura Energy
Performance |
| Timeline |
| AXP Energy |
| Altura Energy |
AXP Energy and Altura Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AXP Energy and Altura Energy
The main advantage of trading using opposite AXP Energy and Altura Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AXP Energy position performs unexpectedly, Altura 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 Altura Energy will offset losses from the drop in Altura Energy's long position.| AXP Energy vs. ADX Energy | AXP Energy vs. Calima Energy Limited | AXP Energy vs. Barrister Energy LLC | AXP Energy vs. AER Energy Resources |
| Altura Energy vs. AER Energy Resources | Altura Energy vs. Alamo Energy Corp | Altura Energy vs. Arete Industries | Altura Energy vs. Barrister Energy LLC |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency |