Correlation Between Rockdale Resources and Altura Energy

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

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

Diversification Opportunities for Rockdale Resources and Altura Energy

-0.94

Correlation Coefficient

Rockdale Resources  Altura Energy

Pay attention - limited upside

The 3 months correlation between Rockdale and Altura is -0.94. Overlapping area represents the amount of risk that can be diversified away by holding Rockdale Resources Corp and Altura Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altura Energy and Rockdale 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 Rockdale Resources Corp are associated (or correlated) with Altura Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altura Energy has no effect on the direction of Rockdale Resources i.e., Rockdale Resources and Altura Energy go up and down completely randomly.

Pair Corralation between Rockdale Resources and Altura Energy

Given the investment horizon of 90 days Rockdale Resources Corp is expected to under-perform the Altura Energy. In addition to that, Rockdale Resources is 4.62 times more volatile than Altura Energy. It trades about -0.18 of its total potential returns per unit of risk. Altura Energy is currently generating about 0.22 per unit of volatility. If you would invest  591.00  in Altura Energy on September 11, 2024 and sell it today you would earn a total of  368.00  from holding Altura Energy or generate 62.27% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	46.88%
Values	Daily Returns

Rockdale Resources Corp  vs.  Altura Energy

Rockdale Resources Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Rockdale Resources Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's essential indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Altura Energy

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Altura Energy are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating basic indicators, Altura Energy reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Rockdale Resources and Altura Energy

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

The idea behind Rockdale Resources Corp and Altura 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.