Correlation Between Eco Atlantic and Bank of New York
Can any of the company-specific risk be diversified away by investing in both Eco Atlantic and Bank of New York 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 Eco Atlantic and Bank of New York into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eco Atlantic Oil and Canadian Banc Corp, you can compare the effects of market volatilities on Eco Atlantic and Bank of New York 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 Eco Atlantic with a short position of Bank of New York. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eco Atlantic and Bank of New York.
Diversification Opportunities for Eco Atlantic and Bank of New York
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Eco and Bank is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Eco Atlantic Oil and Canadian Banc Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canadian Banc Corp and Eco Atlantic 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 Eco Atlantic Oil are associated (or correlated) with Bank of New York. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canadian Banc Corp has no effect on the direction of Eco Atlantic i.e., Eco Atlantic and Bank of New York go up and down completely randomly.
Pair Corralation between Eco Atlantic and Bank of New York
Assuming the 90 days horizon Eco Atlantic Oil is expected to under-perform the Bank of New York. In addition to that, Eco Atlantic is 4.41 times more volatile than Canadian Banc Corp. It trades about -0.13 of its total potential returns per unit of risk. Canadian Banc Corp is currently generating about 0.38 per unit of volatility. If you would invest 1,129 in Canadian Banc Corp on September 2, 2024 and sell it today you would earn a total of 71.00 from holding Canadian Banc Corp or generate 6.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eco Atlantic Oil vs. Canadian Banc Corp
Performance |
| Timeline |
| Eco Atlantic Oil |
| Canadian Banc Corp |
Eco Atlantic and Bank of New York Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eco Atlantic and Bank of New York
The main advantage of trading using opposite Eco Atlantic and Bank of New York positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eco Atlantic position performs unexpectedly, Bank of New York 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 Bank of New York will offset losses from the drop in Bank of New York's long position.The idea behind Eco Atlantic Oil and Canadian Banc Corp 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.| Bank of New York vs. Financial 15 Split | Bank of New York vs. Life Banc Split | Bank of New York vs. Global Dividend Growth | Bank of New York vs. Brompton Split Banc |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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