Correlation Between Camber Energy and Cross Timbers
Can any of the company-specific risk be diversified away by investing in both Camber Energy and Cross Timbers 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 Cross Timbers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Camber Energy and Cross Timbers Royalty, you can compare the effects of market volatilities on Camber Energy and Cross Timbers 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 Cross Timbers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Camber Energy and Cross Timbers.
Diversification Opportunities for Camber Energy and Cross Timbers
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Camber and Cross is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Camber Energy and Cross Timbers Royalty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cross Timbers Royalty 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 Cross Timbers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cross Timbers Royalty has no effect on the direction of Camber Energy i.e., Camber Energy and Cross Timbers go up and down completely randomly.
Pair Corralation between Camber Energy and Cross Timbers
Considering the 90-day investment horizon Camber Energy is expected to under-perform the Cross Timbers. In addition to that, Camber Energy is 3.04 times more volatile than Cross Timbers Royalty. It trades about -0.17 of its total potential returns per unit of risk. Cross Timbers Royalty is currently generating about -0.04 per unit of volatility. If you would invest 1,328 in Cross Timbers Royalty on September 1, 2024 and sell it today you would lose (234.00) from holding Cross Timbers Royalty or give up 17.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Camber Energy vs. Cross Timbers Royalty
Performance |
| Timeline |
| Camber Energy |
| Cross Timbers Royalty |
Camber Energy and Cross Timbers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Camber Energy and Cross Timbers
The main advantage of trading using opposite Camber Energy and Cross Timbers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Camber Energy position performs unexpectedly, Cross Timbers 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 Cross Timbers will offset losses from the drop in Cross Timbers' long position.The idea behind Camber Energy and Cross Timbers Royalty 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.| Cross Timbers vs. Sabine Royalty Trust | Cross Timbers vs. Mesa Royalty Trust | Cross Timbers vs. San Juan Basin | Cross Timbers vs. Permian Basin Royalty |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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