Correlation Between Camber Energy and Baytex Energy
Can any of the company-specific risk be diversified away by investing in both Camber Energy and Baytex 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 Camber Energy and Baytex Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Camber Energy and Baytex Energy Corp, you can compare the effects of market volatilities on Camber Energy and Baytex 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 Camber Energy with a short position of Baytex Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Camber Energy and Baytex Energy.
Diversification Opportunities for Camber Energy and Baytex Energy
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Camber and Baytex is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Camber Energy and Baytex Energy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baytex Energy Corp and Camber 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 Camber Energy are associated (or correlated) with Baytex Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baytex Energy Corp has no effect on the direction of Camber Energy i.e., Camber Energy and Baytex Energy go up and down completely randomly.
Pair Corralation between Camber Energy and Baytex Energy
Considering the 90-day investment horizon Camber Energy is expected to under-perform the Baytex Energy. In addition to that, Camber Energy is 3.27 times more volatile than Baytex Energy Corp. It trades about -0.28 of its total potential returns per unit of risk. Baytex Energy Corp is currently generating about -0.2 per unit of volatility. If you would invest 307.00 in Baytex Energy Corp on September 4, 2024 and sell it today you would lose (25.00) from holding Baytex Energy Corp or give up 8.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Camber Energy vs. Baytex Energy Corp
Performance |
| Timeline |
| Camber Energy |
| Baytex Energy Corp |
Camber Energy and Baytex Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Camber Energy and Baytex Energy
The main advantage of trading using opposite Camber Energy and Baytex Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Camber Energy position performs unexpectedly, Baytex 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 Baytex Energy will offset losses from the drop in Baytex Energy's long position.The idea behind Camber Energy and Baytex Energy Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Baytex Energy vs. Vermilion Energy | Baytex Energy vs. Obsidian Energy | Baytex Energy vs. Canadian Natural Resources | Baytex Energy vs. Ovintiv |
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 CEOs Directory module to screen CEOs from public companies around the world.
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