Correlation Between Condor Energies and AKITA Drilling
Can any of the company-specific risk be diversified away by investing in both Condor Energies and AKITA Drilling 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 Condor Energies and AKITA Drilling into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Condor Energies and AKITA Drilling, you can compare the effects of market volatilities on Condor Energies and AKITA Drilling 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 Condor Energies with a short position of AKITA Drilling. Check out your portfolio center. Please also check ongoing floating volatility patterns of Condor Energies and AKITA Drilling.
Diversification Opportunities for Condor Energies and AKITA Drilling
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Condor and AKITA is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Condor Energies and AKITA Drilling in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AKITA Drilling and Condor Energies 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 Condor Energies are associated (or correlated) with AKITA Drilling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AKITA Drilling has no effect on the direction of Condor Energies i.e., Condor Energies and AKITA Drilling go up and down completely randomly.
Pair Corralation between Condor Energies and AKITA Drilling
Assuming the 90 days trading horizon Condor Energies is expected to generate 1.76 times more return on investment than AKITA Drilling. However, Condor Energies is 1.76 times more volatile than AKITA Drilling. It trades about 0.2 of its potential returns per unit of risk. AKITA Drilling is currently generating about 0.08 per unit of risk. If you would invest 170.00 in Condor Energies on August 29, 2024 and sell it today you would earn a total of 69.00 from holding Condor Energies or generate 40.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Condor Energies vs. AKITA Drilling
Performance |
| Timeline |
| Condor Energies |
| AKITA Drilling |
Condor Energies and AKITA Drilling Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Condor Energies and AKITA Drilling
The main advantage of trading using opposite Condor Energies and AKITA Drilling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Condor Energies position performs unexpectedly, AKITA Drilling 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 AKITA Drilling will offset losses from the drop in AKITA Drilling's long position.| Condor Energies vs. AKITA Drilling | Condor Energies vs. CVW CleanTech | Condor Energies vs. Verizon Communications CDR | Condor Energies vs. Xtract One Technologies |
| AKITA Drilling vs. Canadian Natural Resources | AKITA Drilling vs. Suncor Energy | AKITA Drilling vs. iShares Canadian HYBrid | AKITA Drilling vs. Altagas Cum Red |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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