Correlation Between Athabasca Oil and Uniteds

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

By analyzing existing cross correlation between Athabasca Oil Corp and Uniteds Limited, you can compare the effects of market volatilities on Athabasca Oil and Uniteds 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 Athabasca Oil with a short position of Uniteds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Athabasca Oil and Uniteds.

Diversification Opportunities for Athabasca Oil and Uniteds

0.1

Correlation Coefficient

Athabasca Oil  Uniteds

Average diversification

The 3 months correlation between Athabasca and Uniteds is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Athabasca Oil Corp and Uniteds Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uniteds Limited and Athabasca Oil 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 Athabasca Oil Corp are associated (or correlated) with Uniteds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Uniteds Limited has no effect on the direction of Athabasca Oil i.e., Athabasca Oil and Uniteds go up and down completely randomly.

Pair Corralation between Athabasca Oil and Uniteds

Assuming the 90 days trading horizon Athabasca Oil Corp is expected to generate 1.21 times more return on investment than Uniteds. However, Athabasca Oil is 1.21 times more volatile than Uniteds Limited. It trades about 0.05 of its potential returns per unit of risk. Uniteds Limited is currently generating about -0.06 per unit of risk. If you would invest  511.00  in Athabasca Oil Corp on December 24, 2024 and sell it today you would earn a total of  29.00  from holding Athabasca Oil Corp or generate 5.68% return on investment over 90 days.

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

Athabasca Oil Corp  vs.  Uniteds Limited

Athabasca Oil Corp

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Athabasca Oil Corp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical indicators, Athabasca Oil may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Uniteds Limited

Risk-Adjusted Performance

Very Weak

Over the last 90 days Uniteds Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Athabasca Oil and Uniteds

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

The idea behind Athabasca Oil Corp and Uniteds Limited 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.