Correlation Between Arete Industries and Advantage Oil

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

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

Diversification Opportunities for Arete Industries and Advantage Oil

0.0

Correlation Coefficient

Arete Industries  Advantage Oil

Pay attention - limited upside

The 3 months correlation between Arete and Advantage is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Arete Industries 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 Arete Industries 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 Arete Industries 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 Arete Industries i.e., Arete Industries and Advantage Oil go up and down completely randomly.

Pair Corralation between Arete Industries and Advantage Oil

If you would invest  603.00  in Advantage Oil Gas on September 13, 2024 and sell it today you would earn a total of  0.00  from holding Advantage Oil Gas or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

Arete Industries  vs.  Advantage Oil Gas

Arete Industries

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Arete Industries has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, Arete Industries is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Advantage Oil Gas

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Arete Industries and Advantage Oil

The main advantage of trading using opposite Arete Industries and Advantage Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arete Industries 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 Arete Industries 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.