Correlation Between Altima Resources and NXT Energy
Can any of the company-specific risk be diversified away by investing in both Altima Resources and NXT 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 Altima Resources and NXT Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Altima Resources and NXT Energy Solutions, you can compare the effects of market volatilities on Altima Resources and NXT 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 Altima Resources with a short position of NXT Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Altima Resources and NXT Energy.
Diversification Opportunities for Altima Resources and NXT Energy
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Altima and NXT is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Altima Resources and NXT Energy Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NXT Energy Solutions and Altima 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 Altima Resources are associated (or correlated) with NXT Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NXT Energy Solutions has no effect on the direction of Altima Resources i.e., Altima Resources and NXT Energy go up and down completely randomly.
Pair Corralation between Altima Resources and NXT Energy
Assuming the 90 days horizon Altima Resources is expected to generate 1.54 times more return on investment than NXT Energy. However, Altima Resources is 1.54 times more volatile than NXT Energy Solutions. It trades about -0.05 of its potential returns per unit of risk. NXT Energy Solutions is currently generating about -0.17 per unit of risk. If you would invest 64.00 in Altima Resources on August 18, 2025 and sell it today you would lose (31.00) from holding Altima Resources or give up 48.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Altima Resources vs. NXT Energy Solutions
Performance |
| Timeline |
| Altima Resources |
| NXT Energy Solutions |
Altima Resources and NXT Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Altima Resources and NXT Energy
The main advantage of trading using opposite Altima Resources and NXT Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Altima Resources position performs unexpectedly, NXT 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 NXT Energy will offset losses from the drop in NXT Energy's long position.| Altima Resources vs. Challenger Energy Group | Altima Resources vs. Petro Matad Limited | Altima Resources vs. Guardian Exploration | Altima Resources vs. Eco Oil Gas |
| NXT Energy vs. Petrofac | NXT Energy vs. Koil Energy Solutions | NXT Energy vs. Jericho Oil Corp | NXT Energy vs. Eco Oil Gas |
Check out your portfolio center.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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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