Correlation Between Altair Resources and Enbridge H

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

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

Diversification Opportunities for Altair Resources and Enbridge H

0.0

Correlation Coefficient

Altair Resources  Enbridge H

Pay attention - limited upside

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

Pair Corralation between Altair Resources and Enbridge H

Assuming the 90 days horizon Altair Resources is expected to generate 10.8 times more return on investment than Enbridge H. However, Altair Resources is 10.8 times more volatile than Enbridge H Cum. It trades about 0.01 of its potential returns per unit of risk. Enbridge H Cum is currently generating about 0.1 per unit of risk. If you would invest  3.00  in Altair Resources on October 23, 2024 and sell it today you would lose (2.00) from holding Altair Resources or give up 66.67% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

Altair Resources  vs.  Enbridge H Cum

Altair Resources

Risk-Adjusted Performance

0 of 100

Very Weak

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

Enbridge H Cum

Risk-Adjusted Performance

23 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Enbridge H Cum are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental drivers, Enbridge H may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Altair Resources and Enbridge H

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

The idea behind Altair Resources and Enbridge H Cum 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.