Correlation Between E Split and Advantage Oil

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

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

Diversification Opportunities for E Split and Advantage Oil

0.32

Correlation Coefficient

E Split  Advantage Oil

Weak diversification

The 3 months correlation between ENS and Advantage is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding E Split Corp and Advantage Oil Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advantage Oil Gas and E Split 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 E Split Corp are associated (or correlated) with Advantage Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advantage Oil Gas has no effect on the direction of E Split i.e., E Split and Advantage Oil go up and down completely randomly.

Pair Corralation between E Split and Advantage Oil

Assuming the 90 days trading horizon E Split is expected to generate 4.41 times less return on investment than Advantage Oil. But when comparing it to its historical volatility, E Split Corp is 1.6 times less risky than Advantage Oil. It trades about 0.03 of its potential returns per unit of risk. Advantage Oil Gas is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  960.00  in Advantage Oil Gas on December 30, 2024 and sell it today you would earn a total of  111.00  from holding Advantage Oil Gas or generate 11.56% return on investment over 90 days.

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

E Split Corp  vs.  Advantage Oil Gas

E Split Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in E Split Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, E Split is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Advantage Oil Gas

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Advantage Oil Gas are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Advantage Oil may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with E Split and Advantage Oil

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

The idea behind E Split Corp and Advantage Oil Gas 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.