Correlation Between Birchcliff Energy and Athabasca Oil
Can any of the company-specific risk be diversified away by investing in both Birchcliff Energy and Athabasca Oil 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 Birchcliff Energy and Athabasca Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Birchcliff Energy and Athabasca Oil Corp, you can compare the effects of market volatilities on Birchcliff Energy and Athabasca Oil 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 Birchcliff Energy with a short position of Athabasca Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Birchcliff Energy and Athabasca Oil.
Diversification Opportunities for Birchcliff Energy and Athabasca Oil
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Birchcliff and Athabasca is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Birchcliff Energy and Athabasca Oil Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Athabasca Oil Corp and Birchcliff 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 Birchcliff Energy are associated (or correlated) with Athabasca Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Athabasca Oil Corp has no effect on the direction of Birchcliff Energy i.e., Birchcliff Energy and Athabasca Oil go up and down completely randomly.
Pair Corralation between Birchcliff Energy and Athabasca Oil
Assuming the 90 days horizon Birchcliff Energy is expected to generate 0.97 times more return on investment than Athabasca Oil. However, Birchcliff Energy is 1.03 times less risky than Athabasca Oil. It trades about 0.33 of its potential returns per unit of risk. Athabasca Oil Corp is currently generating about 0.17 per unit of risk. If you would invest 350.00 in Birchcliff Energy on October 23, 2024 and sell it today you would earn a total of 45.00 from holding Birchcliff Energy or generate 12.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Birchcliff Energy vs. Athabasca Oil Corp
Performance |
| Timeline |
| Birchcliff Energy |
| Athabasca Oil Corp |
Birchcliff Energy and Athabasca Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Birchcliff Energy and Athabasca Oil
The main advantage of trading using opposite Birchcliff Energy and Athabasca Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Birchcliff Energy position performs unexpectedly, Athabasca Oil 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 Athabasca Oil will offset losses from the drop in Athabasca Oil's long position.| Birchcliff Energy vs. Tamarack Valley Energy | Birchcliff Energy vs. Peyto ExplorationDevelopment Corp | Birchcliff Energy vs. Gear Energy | Birchcliff Energy vs. Spartan Delta Corp |
| Athabasca Oil vs. Pine Cliff Energy | Athabasca Oil vs. Cardinal Energy | Athabasca Oil vs. Tamarack Valley Energy | Athabasca Oil vs. Saturn Oil Gas |
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 Valuation module to check real value of public entities based on technical and fundamental data.
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