Correlation Between Birchcliff Energy and Kelt Exploration
Can any of the company-specific risk be diversified away by investing in both Birchcliff Energy and Kelt Exploration 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 Birchcliff Energy and Kelt Exploration into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Birchcliff Energy and Kelt Exploration, you can compare the effects of market volatilities on Birchcliff Energy and Kelt Exploration 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 Birchcliff Energy with a short position of Kelt Exploration. Check out your portfolio center. Please also check ongoing floating volatility patterns of Birchcliff Energy and Kelt Exploration.
Diversification Opportunities for Birchcliff Energy and Kelt Exploration
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Birchcliff and Kelt is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Birchcliff Energy and Kelt Exploration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kelt Exploration and Birchcliff Energy 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 Birchcliff Energy are associated (or correlated) with Kelt Exploration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kelt Exploration has no effect on the direction of Birchcliff Energy i.e., Birchcliff Energy and Kelt Exploration go up and down completely randomly.
Pair Corralation between Birchcliff Energy and Kelt Exploration
Assuming the 90 days trading horizon Birchcliff Energy is expected to under-perform the Kelt Exploration. In addition to that, Birchcliff Energy is 1.1 times more volatile than Kelt Exploration. It trades about 0.0 of its total potential returns per unit of risk. Kelt Exploration is currently generating about 0.09 per unit of volatility. If you would invest 646.00 in Kelt Exploration on August 28, 2024 and sell it today you would earn a total of 25.00 from holding Kelt Exploration or generate 3.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Birchcliff Energy vs. Kelt Exploration
Performance |
| Timeline |
| Birchcliff Energy |
| Kelt Exploration |
Birchcliff Energy and Kelt Exploration Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Birchcliff Energy and Kelt Exploration
The main advantage of trading using opposite Birchcliff Energy and Kelt Exploration positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Birchcliff Energy position performs unexpectedly, Kelt Exploration 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 Kelt Exploration will offset losses from the drop in Kelt Exploration's long position.| Birchcliff Energy vs. Yangarra Resources | Birchcliff Energy vs. iShares Canadian HYBrid | Birchcliff Energy vs. Altagas Cum Red | Birchcliff Energy vs. European Residential Real |
| Kelt Exploration vs. Yangarra Resources | Kelt Exploration vs. iShares Canadian HYBrid | Kelt Exploration vs. Altagas Cum Red | Kelt Exploration vs. European Residential Real |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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