Correlation Between Crew Energy and AER Energy
Can any of the company-specific risk be diversified away by investing in both Crew Energy and AER 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 Crew Energy and AER Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Crew Energy and AER Energy Resources, you can compare the effects of market volatilities on Crew Energy and AER 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 Crew Energy with a short position of AER Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crew Energy and AER Energy.
Diversification Opportunities for Crew Energy and AER Energy
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Crew and AER is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Crew Energy and AER Energy Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AER Energy Resources and Crew 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 Crew Energy are associated (or correlated) with AER Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AER Energy Resources has no effect on the direction of Crew Energy i.e., Crew Energy and AER Energy go up and down completely randomly.
Pair Corralation between Crew Energy and AER Energy
Assuming the 90 days horizon Crew Energy is expected to generate 8.53 times less return on investment than AER Energy. But when comparing it to its historical volatility, Crew Energy is 10.79 times less risky than AER Energy. It trades about 0.1 of its potential returns per unit of risk. AER Energy Resources is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 0.01 in AER Energy Resources on August 28, 2024 and sell it today you would earn a total of 0.00 from holding AER Energy Resources or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 71.2% |
| Values | Daily Returns |
Crew Energy vs. AER Energy Resources
Performance |
| Timeline |
| Crew Energy |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
| AER Energy Resources |
Crew Energy and AER Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Crew Energy and AER Energy
The main advantage of trading using opposite Crew Energy and AER Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crew Energy position performs unexpectedly, AER 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 AER Energy will offset losses from the drop in AER Energy's long position.| Crew Energy vs. Surge Energy | Crew Energy vs. Athabasca Oil Corp | Crew Energy vs. Birchcliff Energy | Crew Energy vs. Tamarack Valley Energy |
| AER Energy vs. Caduceus Software Systems | AER Energy vs. North Springs Resources | AER Energy vs. Nyxio Tech Corp | AER Energy vs. Access Power Co |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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