Correlation Between Altagas Cum and ESE Entertainment

Can any of the company-specific risk be diversified away by investing in both Altagas Cum and ESE Entertainment 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 Altagas Cum and ESE Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Altagas Cum Red and ESE Entertainment, you can compare the effects of market volatilities on Altagas Cum and ESE Entertainment 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 Altagas Cum with a short position of ESE Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Altagas Cum and ESE Entertainment.

Diversification Opportunities for Altagas Cum and ESE Entertainment

-0.28

Correlation Coefficient

Altagas Cum  ESE Entertainment

Very good diversification

The 3 months correlation between Altagas and ESE is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Altagas Cum Red and ESE Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ESE Entertainment and Altagas Cum 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 Altagas Cum Red are associated (or correlated) with ESE Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ESE Entertainment has no effect on the direction of Altagas Cum i.e., Altagas Cum and ESE Entertainment go up and down completely randomly.

Pair Corralation between Altagas Cum and ESE Entertainment

Assuming the 90 days trading horizon Altagas Cum Red is expected to generate 0.1 times more return on investment than ESE Entertainment. However, Altagas Cum Red is 9.6 times less risky than ESE Entertainment. It trades about 0.07 of its potential returns per unit of risk. ESE Entertainment is currently generating about -0.01 per unit of risk. If you would invest  1,906  in Altagas Cum Red on September 3, 2024 and sell it today you would earn a total of  59.00  from holding Altagas Cum Red or generate 3.1% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Altagas Cum Red  vs.  ESE Entertainment

Altagas Cum Red

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Altagas Cum Red are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Altagas Cum is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

ESE Entertainment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ESE Entertainment has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, ESE Entertainment is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Altagas Cum and ESE Entertainment

The main advantage of trading using opposite Altagas Cum and ESE Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Altagas Cum position performs unexpectedly, ESE Entertainment 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 ESE Entertainment will offset losses from the drop in ESE Entertainment's long position.

The idea behind Altagas Cum Red and ESE Entertainment 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.

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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.