Correlation Between Canuc Resources and InPlay Oil
Can any of the company-specific risk be diversified away by investing in both Canuc Resources and InPlay 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 Canuc Resources and InPlay Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canuc Resources Corp and InPlay Oil Corp, you can compare the effects of market volatilities on Canuc Resources and InPlay 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 Canuc Resources with a short position of InPlay Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canuc Resources and InPlay Oil.
Diversification Opportunities for Canuc Resources and InPlay Oil
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Canuc and InPlay is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Canuc Resources Corp and InPlay Oil Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InPlay Oil Corp and Canuc 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 Canuc Resources Corp are associated (or correlated) with InPlay Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of InPlay Oil Corp has no effect on the direction of Canuc Resources i.e., Canuc Resources and InPlay Oil go up and down completely randomly.
Pair Corralation between Canuc Resources and InPlay Oil
Assuming the 90 days horizon Canuc Resources Corp is expected to generate 5.2 times more return on investment than InPlay Oil. However, Canuc Resources is 5.2 times more volatile than InPlay Oil Corp. It trades about 0.02 of its potential returns per unit of risk. InPlay Oil Corp is currently generating about -0.02 per unit of risk. If you would invest 12.00 in Canuc Resources Corp on August 25, 2024 and sell it today you would lose (5.00) from holding Canuc Resources Corp or give up 41.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canuc Resources Corp vs. InPlay Oil Corp
Performance |
| Timeline |
| Canuc Resources Corp |
| InPlay Oil Corp |
Canuc Resources and InPlay Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canuc Resources and InPlay Oil
The main advantage of trading using opposite Canuc Resources and InPlay Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canuc Resources position performs unexpectedly, InPlay 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 InPlay Oil will offset losses from the drop in InPlay Oil's long position.| Canuc Resources vs. InPlay Oil Corp | Canuc Resources vs. Yangarra Resources | Canuc Resources vs. iShares Canadian HYBrid | Canuc Resources vs. Altagas Cum Red |
| InPlay Oil vs. Gear Energy | InPlay Oil vs. Journey Energy | InPlay Oil vs. Yangarra Resources | InPlay Oil vs. Obsidian 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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