Correlation Between 88 Energy and Asara Resources
Can any of the company-specific risk be diversified away by investing in both 88 Energy and Asara 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 88 Energy and Asara Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 88 Energy and Asara Resources, you can compare the effects of market volatilities on 88 Energy and Asara 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 88 Energy with a short position of Asara Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of 88 Energy and Asara Resources.
Diversification Opportunities for 88 Energy and Asara Resources
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 88E and Asara is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding 88 Energy and Asara Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asara Resources and 88 Energy 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 88 Energy are associated (or correlated) with Asara Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asara Resources has no effect on the direction of 88 Energy i.e., 88 Energy and Asara Resources go up and down completely randomly.
Pair Corralation between 88 Energy and Asara Resources
Assuming the 90 days trading horizon 88 Energy is expected to generate 2.75 times more return on investment than Asara Resources. However, 88 Energy is 2.75 times more volatile than Asara Resources. It trades about 0.06 of its potential returns per unit of risk. Asara Resources is currently generating about 0.02 per unit of risk. If you would invest 1.09 in 88 Energy on September 24, 2024 and sell it today you would lose (0.89) from holding 88 Energy or give up 81.65% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
88 Energy vs. Asara Resources
Performance |
Timeline |
88 Energy |
Asara Resources |
88 Energy and Asara Resources Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with 88 Energy and Asara Resources
The main advantage of trading using opposite 88 Energy and Asara Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 88 Energy position performs unexpectedly, Asara 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 Asara Resources will offset losses from the drop in Asara Resources' long position.88 Energy vs. Westpac Banking | 88 Energy vs. ABACUS STORAGE KING | 88 Energy vs. Odyssey Energy | 88 Energy vs. Suncorp Group |
Asara Resources vs. Energy Resources | Asara Resources vs. 88 Energy | Asara Resources vs. Amani Gold | Asara Resources vs. A1 Investments 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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