Correlation Between E Split and Accelerate Canadian
Can any of the company-specific risk be diversified away by investing in both E Split and Accelerate Canadian 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 E Split and Accelerate Canadian into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between E Split Corp and Accelerate Canadian Long, you can compare the effects of market volatilities on E Split and Accelerate Canadian 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 E Split with a short position of Accelerate Canadian. Check out your portfolio center. Please also check ongoing floating volatility patterns of E Split and Accelerate Canadian.
Diversification Opportunities for E Split and Accelerate Canadian
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ENS-PA and Accelerate is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding E Split Corp and Accelerate Canadian Long in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Accelerate Canadian Long and E Split 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 E Split Corp are associated (or correlated) with Accelerate Canadian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Accelerate Canadian Long has no effect on the direction of E Split i.e., E Split and Accelerate Canadian go up and down completely randomly.
Pair Corralation between E Split and Accelerate Canadian
Assuming the 90 days trading horizon E Split Corp is expected to generate 1.21 times more return on investment than Accelerate Canadian. However, E Split is 1.21 times more volatile than Accelerate Canadian Long. It trades about 0.26 of its potential returns per unit of risk. Accelerate Canadian Long is currently generating about 0.32 per unit of risk. If you would invest 1,068 in E Split Corp on August 25, 2024 and sell it today you would earn a total of 49.00 from holding E Split Corp or generate 4.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
E Split Corp vs. Accelerate Canadian Long
Performance |
| Timeline |
| E Split Corp |
| Accelerate Canadian Long |
E Split and Accelerate Canadian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with E Split and Accelerate Canadian
The main advantage of trading using opposite E Split and Accelerate Canadian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if E Split position performs unexpectedly, Accelerate Canadian 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 Accelerate Canadian will offset losses from the drop in Accelerate Canadian's long position.The idea behind E Split Corp and Accelerate Canadian Long pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Accelerate Canadian vs. Trican Well Service | Accelerate Canadian vs. Ensign Energy Services | Accelerate Canadian vs. Calfrac Well Services | Accelerate Canadian vs. Birchcliff Energy |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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