Correlation Between Birchcliff Energy and Tourmaline Oil
Can any of the company-specific risk be diversified away by investing in both Birchcliff Energy and Tourmaline 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 Birchcliff Energy and Tourmaline Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Birchcliff Energy and Tourmaline Oil Corp, you can compare the effects of market volatilities on Birchcliff Energy and Tourmaline 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 Birchcliff Energy with a short position of Tourmaline Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Birchcliff Energy and Tourmaline Oil.
Diversification Opportunities for Birchcliff Energy and Tourmaline Oil
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Birchcliff and Tourmaline is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Birchcliff Energy and Tourmaline Oil Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tourmaline Oil Corp 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 Tourmaline Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tourmaline Oil Corp has no effect on the direction of Birchcliff Energy i.e., Birchcliff Energy and Tourmaline Oil go up and down completely randomly.
Pair Corralation between Birchcliff Energy and Tourmaline Oil
Assuming the 90 days trading horizon Birchcliff Energy is expected to under-perform the Tourmaline Oil. In addition to that, Birchcliff Energy is 1.21 times more volatile than Tourmaline Oil Corp. It trades about 0.0 of its total potential returns per unit of risk. Tourmaline Oil Corp is currently generating about 0.09 per unit of volatility. If you would invest 6,401 in Tourmaline Oil Corp on August 29, 2024 and sell it today you would earn a total of 222.00 from holding Tourmaline Oil Corp or generate 3.47% 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. Tourmaline Oil Corp
Performance |
| Timeline |
| Birchcliff Energy |
| Tourmaline Oil Corp |
Birchcliff Energy and Tourmaline Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Birchcliff Energy and Tourmaline Oil
The main advantage of trading using opposite Birchcliff Energy and Tourmaline Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Birchcliff Energy position performs unexpectedly, Tourmaline 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 Tourmaline Oil will offset losses from the drop in Tourmaline Oil's long position.| Birchcliff Energy vs. Tourmaline Oil Corp | Birchcliff Energy vs. ARC Resources | Birchcliff Energy vs. NuVista Energy | Birchcliff Energy vs. Whitecap Resources |
| Tourmaline Oil vs. ARC Resources | Tourmaline Oil vs. Whitecap Resources | Tourmaline Oil vs. MEG Energy Corp | Tourmaline Oil vs. Birchcliff Energy |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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