Correlation Between Tamarack Valley and Athabasca Oil
Can any of the company-specific risk be diversified away by investing in both Tamarack Valley and Athabasca Oil 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 Tamarack Valley and Athabasca Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tamarack Valley Energy and Athabasca Oil Corp, you can compare the effects of market volatilities on Tamarack Valley and Athabasca Oil 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 Tamarack Valley with a short position of Athabasca Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tamarack Valley and Athabasca Oil.
Diversification Opportunities for Tamarack Valley and Athabasca Oil
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Tamarack and Athabasca is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Tamarack Valley Energy and Athabasca Oil Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Athabasca Oil Corp and Tamarack Valley 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 Tamarack Valley Energy are associated (or correlated) with Athabasca Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Athabasca Oil Corp has no effect on the direction of Tamarack Valley i.e., Tamarack Valley and Athabasca Oil go up and down completely randomly.
Pair Corralation between Tamarack Valley and Athabasca Oil
Assuming the 90 days horizon Tamarack Valley is expected to generate 1.77 times less return on investment than Athabasca Oil. But when comparing it to its historical volatility, Tamarack Valley Energy is 1.34 times less risky than Athabasca Oil. It trades about 0.13 of its potential returns per unit of risk. Athabasca Oil Corp is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 346.00 in Athabasca Oil Corp on October 23, 2024 and sell it today you would earn a total of 22.00 from holding Athabasca Oil Corp or generate 6.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tamarack Valley Energy vs. Athabasca Oil Corp
Performance |
| Timeline |
| Tamarack Valley Energy |
| Athabasca Oil Corp |
Tamarack Valley and Athabasca Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tamarack Valley and Athabasca Oil
The main advantage of trading using opposite Tamarack Valley and Athabasca Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tamarack Valley position performs unexpectedly, Athabasca Oil 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 Athabasca Oil will offset losses from the drop in Athabasca Oil's long position.| Tamarack Valley vs. Cedar Realty Trust | Tamarack Valley vs. Inflection Point Acquisition | Tamarack Valley vs. Pinterest | Tamarack Valley vs. BCE Inc |
| Athabasca Oil vs. Pine Cliff Energy | Athabasca Oil vs. Cardinal Energy | Athabasca Oil vs. Tamarack Valley Energy | Athabasca Oil vs. Saturn Oil Gas |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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