Correlation Between Camber Energy and Canadian Natural
Can any of the company-specific risk be diversified away by investing in both Camber Energy and Canadian Natural 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 Canadian Natural into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Camber Energy and Canadian Natural Resources, you can compare the effects of market volatilities on Camber Energy and Canadian Natural 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 Canadian Natural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Camber Energy and Canadian Natural.
Diversification Opportunities for Camber Energy and Canadian Natural
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Camber and Canadian is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Camber Energy and Canadian Natural Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canadian Natural Res 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 Canadian Natural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canadian Natural Res has no effect on the direction of Camber Energy i.e., Camber Energy and Canadian Natural go up and down completely randomly.
Pair Corralation between Camber Energy and Canadian Natural
Considering the 90-day investment horizon Camber Energy is expected to under-perform the Canadian Natural. In addition to that, Camber Energy is 4.81 times more volatile than Canadian Natural Resources. It trades about -0.09 of its total potential returns per unit of risk. Canadian Natural Resources is currently generating about 0.05 per unit of volatility. If you would invest 2,521 in Canadian Natural Resources on September 12, 2024 and sell it today you would earn a total of 691.00 from holding Canadian Natural Resources or generate 27.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Camber Energy vs. Canadian Natural Resources
Performance |
| Timeline |
| Camber Energy |
| Canadian Natural Res |
Camber Energy and Canadian Natural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Camber Energy and Canadian Natural
The main advantage of trading using opposite Camber Energy and Canadian Natural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Camber Energy position performs unexpectedly, Canadian Natural 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 Canadian Natural will offset losses from the drop in Canadian Natural's long position.The idea behind Camber Energy and Canadian Natural Resources 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.| Canadian Natural vs. Baytex Energy Corp | Canadian Natural vs. Vermilion Energy | Canadian Natural vs. Obsidian Energy | Canadian Natural 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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