Correlation Between Altagas Cum and Faraday Copper

Can any of the company-specific risk be diversified away by investing in both Altagas Cum and Faraday Copper 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 Altagas Cum and Faraday Copper into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Altagas Cum Red and Faraday Copper Corp, you can compare the effects of market volatilities on Altagas Cum and Faraday Copper 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 Altagas Cum with a short position of Faraday Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Altagas Cum and Faraday Copper.

Diversification Opportunities for Altagas Cum and Faraday Copper

0.13

Correlation Coefficient

Altagas Cum  Faraday Copper

Average diversification

The 3 months correlation between Altagas and Faraday is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Altagas Cum Red and Faraday Copper Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Faraday Copper Corp and Altagas Cum 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 Altagas Cum Red are associated (or correlated) with Faraday Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Faraday Copper Corp has no effect on the direction of Altagas Cum i.e., Altagas Cum and Faraday Copper go up and down completely randomly.

Pair Corralation between Altagas Cum and Faraday Copper

Assuming the 90 days trading horizon Altagas Cum Red is expected to under-perform the Faraday Copper. But the preferred stock apears to be less risky and, when comparing its historical volatility, Altagas Cum Red is 1.76 times less risky than Faraday Copper. The preferred stock trades about -0.18 of its potential returns per unit of risk. The Faraday Copper Corp is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest  83.00  in Faraday Copper Corp on April 2, 2024 and sell it today you would lose (2.00) from holding Faraday Copper Corp or give up 2.41% of portfolio value over 90 days.

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

Altagas Cum Red  vs.  Faraday Copper Corp

Altagas Cum Red

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Altagas Cum Red are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Altagas Cum is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Faraday Copper Corp

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Faraday Copper Corp are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Faraday Copper displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Altagas Cum and Faraday Copper

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

The idea behind Altagas Cum Red and Faraday Copper Corp 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.