Correlation Between Huntsman Exploration and Ascendant Resources
Can any of the company-specific risk be diversified away by investing in both Huntsman Exploration and Ascendant 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 Huntsman Exploration and Ascendant Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Huntsman Exploration and Ascendant Resources, you can compare the effects of market volatilities on Huntsman Exploration and Ascendant 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 Huntsman Exploration with a short position of Ascendant Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huntsman Exploration and Ascendant Resources.
Diversification Opportunities for Huntsman Exploration and Ascendant Resources
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Huntsman and Ascendant is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Huntsman Exploration and Ascendant Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ascendant Resources and Huntsman Exploration 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 Huntsman Exploration are associated (or correlated) with Ascendant Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ascendant Resources has no effect on the direction of Huntsman Exploration i.e., Huntsman Exploration and Ascendant Resources go up and down completely randomly.
Pair Corralation between Huntsman Exploration and Ascendant Resources
Assuming the 90 days horizon Huntsman Exploration is expected to generate 3.96 times more return on investment than Ascendant Resources. However, Huntsman Exploration is 3.96 times more volatile than Ascendant Resources. It trades about 0.06 of its potential returns per unit of risk. Ascendant Resources is currently generating about 0.02 per unit of risk. If you would invest 2.40 in Huntsman Exploration on September 1, 2024 and sell it today you would earn a total of 1.30 from holding Huntsman Exploration or generate 54.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Huntsman Exploration vs. Ascendant Resources
Performance |
| Timeline |
| Huntsman Exploration |
| Ascendant Resources |
Huntsman Exploration and Ascendant Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Huntsman Exploration and Ascendant Resources
The main advantage of trading using opposite Huntsman Exploration and Ascendant Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huntsman Exploration position performs unexpectedly, Ascendant 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 Ascendant Resources will offset losses from the drop in Ascendant Resources' long position.| Huntsman Exploration vs. Aurelia Metals Limited | Huntsman Exploration vs. Adriatic Metals PLC | Huntsman Exploration vs. American Helium | Huntsman Exploration vs. Progressive Planet Solutions |
| Ascendant Resources vs. Edison Cobalt Corp | Ascendant Resources vs. Champion Bear Resources | Ascendant Resources vs. Avarone Metals | Ascendant Resources vs. Adriatic Metals 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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