Correlation Between Eco Atlantic and American Hotel
Can any of the company-specific risk be diversified away by investing in both Eco Atlantic and American Hotel 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 American Hotel 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 American Hotel Income, you can compare the effects of market volatilities on Eco Atlantic and American Hotel 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 American Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eco Atlantic and American Hotel.
Diversification Opportunities for Eco Atlantic and American Hotel
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Eco and American is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Eco Atlantic Oil and American Hotel Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Hotel Income 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 American Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Hotel Income has no effect on the direction of Eco Atlantic i.e., Eco Atlantic and American Hotel go up and down completely randomly.
Pair Corralation between Eco Atlantic and American Hotel
Assuming the 90 days horizon Eco Atlantic Oil is expected to generate 0.84 times more return on investment than American Hotel. However, Eco Atlantic Oil is 1.19 times less risky than American Hotel. It trades about 0.0 of its potential returns per unit of risk. American Hotel Income is currently generating about -0.04 per unit of risk. If you would invest 30.00 in Eco Atlantic Oil on September 3, 2024 and sell it today you would lose (12.00) from holding Eco Atlantic Oil or give up 40.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 92.93% |
| Values | Daily Returns |
Eco Atlantic Oil vs. American Hotel Income
Performance |
| Timeline |
| Eco Atlantic Oil |
| American Hotel Income |
Eco Atlantic and American Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eco Atlantic and American Hotel
The main advantage of trading using opposite Eco Atlantic and American Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eco Atlantic position performs unexpectedly, American Hotel 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 American Hotel will offset losses from the drop in American Hotel's long position.| Eco Atlantic vs. CGX Energy | Eco Atlantic vs. Africa Oil Corp | Eco Atlantic vs. Africa Energy Corp | Eco Atlantic vs. Valeura Energy |
| American Hotel vs. KDA Group | American Hotel vs. BMO Aggregate Bond | American Hotel vs. Terreno Resources Corp | American Hotel vs. iShares Canadian HYBrid |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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