Correlation Between Alexander Baldwin and TransAtlantic Petroleum

Can any of the company-specific risk be diversified away by investing in both Alexander Baldwin and TransAtlantic Petroleum 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 Alexander Baldwin and TransAtlantic Petroleum into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Alexander Baldwin Holdings and TransAtlantic Petroleum, you can compare the effects of market volatilities on Alexander Baldwin and TransAtlantic Petroleum 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 Alexander Baldwin with a short position of TransAtlantic Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alexander Baldwin and TransAtlantic Petroleum.

Diversification Opportunities for Alexander Baldwin and TransAtlantic Petroleum

0.5

Correlation Coefficient

Alexander Baldwin  TransAtlantic Petroleum

Very weak diversification

The 3 months correlation between Alexander and TransAtlantic is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Alexander Baldwin Holdings and TransAtlantic Petroleum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TransAtlantic Petroleum and Alexander Baldwin 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 Alexander Baldwin Holdings are associated (or correlated) with TransAtlantic Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TransAtlantic Petroleum has no effect on the direction of Alexander Baldwin i.e., Alexander Baldwin and TransAtlantic Petroleum go up and down completely randomly.

Pair Corralation between Alexander Baldwin and TransAtlantic Petroleum

If you would invest  2,928  in TransAtlantic Petroleum on September 21, 2024 and sell it today you would earn a total of  0.00  from holding TransAtlantic Petroleum or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	4.55%
Values	Daily Returns

Alexander Baldwin Holdings  vs.  TransAtlantic Petroleum

Alexander Baldwin

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alexander Baldwin Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

TransAtlantic Petroleum

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TransAtlantic Petroleum has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, TransAtlantic Petroleum is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Alexander Baldwin and TransAtlantic Petroleum

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

The idea behind Alexander Baldwin Holdings and TransAtlantic Petroleum 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.