Correlation Between Athabasca Oil and Spartan Delta

Can any of the company-specific risk be diversified away by investing in both Athabasca Oil and Spartan Delta 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 Spartan Delta 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 Spartan Delta Corp, you can compare the effects of market volatilities on Athabasca Oil and Spartan Delta 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 Spartan Delta. Check out your portfolio center. Please also check ongoing floating volatility patterns of Athabasca Oil and Spartan Delta.

Diversification Opportunities for Athabasca Oil and Spartan Delta

0.09

Correlation Coefficient

Athabasca Oil  Spartan Delta

Significant diversification

The 3 months correlation between Athabasca and Spartan is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Athabasca Oil Corp and Spartan Delta Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spartan Delta Corp 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 Spartan Delta. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spartan Delta Corp has no effect on the direction of Athabasca Oil i.e., Athabasca Oil and Spartan Delta go up and down completely randomly.

Pair Corralation between Athabasca Oil and Spartan Delta

Assuming the 90 days horizon Athabasca Oil Corp is not expected to generate positive returns. However, Athabasca Oil Corp is 1.65 times less risky than Spartan Delta. It waists most of its returns potential to compensate for thr risk taken. Spartan Delta is generating about -0.04 per unit of risk. If you would invest  377.00  in Athabasca Oil Corp on September 4, 2024 and sell it today you would lose (5.00) from holding Athabasca Oil Corp or give up 1.33% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	90.63%
Values	Daily Returns

Athabasca Oil Corp  vs.  Spartan Delta Corp

Athabasca Oil Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Athabasca Oil Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Athabasca Oil is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Spartan Delta Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Spartan Delta Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Athabasca Oil and Spartan Delta

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

The idea behind Athabasca Oil Corp and Spartan Delta Corp 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.

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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.