Correlation Between Eco Atlantic and Premium Income
Can any of the company-specific risk be diversified away by investing in both Eco Atlantic and Premium Income 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 Premium Income 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 Premium Income, you can compare the effects of market volatilities on Eco Atlantic and Premium Income 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 Premium Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eco Atlantic and Premium Income.
Diversification Opportunities for Eco Atlantic and Premium Income
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Eco and Premium is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Eco Atlantic Oil and Premium Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Premium 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 Premium Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Premium Income has no effect on the direction of Eco Atlantic i.e., Eco Atlantic and Premium Income go up and down completely randomly.
Pair Corralation between Eco Atlantic and Premium Income
Assuming the 90 days horizon Eco Atlantic Oil is expected to generate 3.11 times more return on investment than Premium Income. However, Eco Atlantic is 3.11 times more volatile than Premium Income. It trades about 0.03 of its potential returns per unit of risk. Premium Income is currently generating about 0.0 per unit of risk. If you would invest 16.00 in Eco Atlantic Oil on September 2, 2024 and sell it today you would earn a total of 2.00 from holding Eco Atlantic Oil or generate 12.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eco Atlantic Oil vs. Premium Income
Performance |
| Timeline |
| Eco Atlantic Oil |
| Premium Income |
Eco Atlantic and Premium Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eco Atlantic and Premium Income
The main advantage of trading using opposite Eco Atlantic and Premium Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eco Atlantic position performs unexpectedly, Premium Income 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 Premium Income will offset losses from the drop in Premium Income's long position.The idea behind Eco Atlantic Oil and Premium Income 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.| Premium Income vs. Sprott Physical Gold | Premium Income vs. Brompton Split Banc | Premium Income vs. TDb Split Corp | Premium Income vs. Prime Dividend Corp |
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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