Correlation Between Athabasca Oil and Diversified Energy

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

Diversification Opportunities for Athabasca Oil and Diversified Energy

0.0

Correlation Coefficient

Athabasca Oil  Diversified Energy

Pay attention - limited upside

The 3 months correlation between Athabasca and Diversified is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Athabasca Oil Corp and Diversified Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Diversified Energy 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 Diversified Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Diversified Energy has no effect on the direction of Athabasca Oil i.e., Athabasca Oil and Diversified Energy go up and down completely randomly.

Pair Corralation between Athabasca Oil and Diversified Energy

If you would invest (100.00) in Diversified Energy on December 2, 2024 and sell it today you would earn a total of  100.00  from holding Diversified Energy or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Athabasca Oil Corp  vs.  Diversified Energy

Athabasca Oil Corp

Risk-Adjusted Performance

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 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.

Diversified Energy

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Athabasca Oil and Diversified Energy

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

The idea behind Athabasca Oil Corp and Diversified Energy 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.