Correlation Between Greenfire Resources and Aclara Resources
Can any of the company-specific risk be diversified away by investing in both Greenfire Resources and Aclara Resources 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 Greenfire Resources and Aclara Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Greenfire Resources and Aclara Resources, you can compare the effects of market volatilities on Greenfire Resources and Aclara Resources 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 Greenfire Resources with a short position of Aclara Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Greenfire Resources and Aclara Resources.
Diversification Opportunities for Greenfire Resources and Aclara Resources
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Greenfire and Aclara is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Greenfire Resources and Aclara Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aclara Resources and Greenfire Resources 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 Greenfire Resources are associated (or correlated) with Aclara Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aclara Resources has no effect on the direction of Greenfire Resources i.e., Greenfire Resources and Aclara Resources go up and down completely randomly.
Pair Corralation between Greenfire Resources and Aclara Resources
Assuming the 90 days trading horizon Greenfire Resources is expected to generate 0.53 times more return on investment than Aclara Resources. However, Greenfire Resources is 1.9 times less risky than Aclara Resources. It trades about 0.08 of its potential returns per unit of risk. Aclara Resources is currently generating about -0.09 per unit of risk. If you would invest 980.00 in Greenfire Resources on September 2, 2024 and sell it today you would earn a total of 42.00 from holding Greenfire Resources or generate 4.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Greenfire Resources vs. Aclara Resources
Performance |
| Timeline |
| Greenfire Resources |
| Aclara Resources |
Greenfire Resources and Aclara Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Greenfire Resources and Aclara Resources
The main advantage of trading using opposite Greenfire Resources and Aclara Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Greenfire Resources position performs unexpectedly, Aclara Resources 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 Aclara Resources will offset losses from the drop in Aclara Resources' long position.| Greenfire Resources vs. Canadian Natural Resources | Greenfire Resources vs. Tourmaline Oil Corp | Greenfire Resources vs. Ovintiv | Greenfire Resources vs. ARC Resources |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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