Correlation Between Bonterra Energy and Cardinal Energy
Can any of the company-specific risk be diversified away by investing in both Bonterra Energy and Cardinal 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 Bonterra Energy and Cardinal Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bonterra Energy Corp and Cardinal Energy, you can compare the effects of market volatilities on Bonterra Energy and Cardinal 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 Bonterra Energy with a short position of Cardinal Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bonterra Energy and Cardinal Energy.
Diversification Opportunities for Bonterra Energy and Cardinal Energy
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bonterra and Cardinal is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Bonterra Energy Corp and Cardinal Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cardinal Energy and Bonterra 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 Bonterra Energy Corp are associated (or correlated) with Cardinal Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cardinal Energy has no effect on the direction of Bonterra Energy i.e., Bonterra Energy and Cardinal Energy go up and down completely randomly.
Pair Corralation between Bonterra Energy and Cardinal Energy
Assuming the 90 days horizon Bonterra Energy Corp is expected to under-perform the Cardinal Energy. In addition to that, Bonterra Energy is 2.1 times more volatile than Cardinal Energy. It trades about -0.12 of its total potential returns per unit of risk. Cardinal Energy is currently generating about -0.02 per unit of volatility. If you would invest 482.00 in Cardinal Energy on September 2, 2024 and sell it today you would lose (11.00) from holding Cardinal Energy or give up 2.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bonterra Energy Corp vs. Cardinal Energy
Performance |
| Timeline |
| Bonterra Energy Corp |
| Cardinal Energy |
Bonterra Energy and Cardinal Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bonterra Energy and Cardinal Energy
The main advantage of trading using opposite Bonterra Energy and Cardinal Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bonterra Energy position performs unexpectedly, Cardinal 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 Cardinal Energy will offset losses from the drop in Cardinal Energy's long position.| Bonterra Energy vs. Aminex PLC | Bonterra Energy vs. Questerre Energy | Bonterra Energy vs. FAR Limited | Bonterra Energy vs. PetroShale |
| Cardinal Energy vs. Tamarack Valley Energy | Cardinal Energy vs. Pine Cliff Energy | Cardinal Energy vs. MEG Energy Corp | Cardinal Energy vs. Headwater Exploration |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
Other Complementary Tools
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |