Correlation Between Camber Energy and Houston American
Can any of the company-specific risk be diversified away by investing in both Camber Energy and Houston American 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 Houston American into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Camber Energy and Houston American Energy, you can compare the effects of market volatilities on Camber Energy and Houston American 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 Houston American. Check out your portfolio center. Please also check ongoing floating volatility patterns of Camber Energy and Houston American.
Diversification Opportunities for Camber Energy and Houston American
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Camber and Houston is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Camber Energy and Houston American Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Houston American Energy 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 Houston American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Houston American Energy has no effect on the direction of Camber Energy i.e., Camber Energy and Houston American go up and down completely randomly.
Pair Corralation between Camber Energy and Houston American
Considering the 90-day investment horizon Camber Energy is expected to under-perform the Houston American. In addition to that, Camber Energy is 1.35 times more volatile than Houston American Energy. It trades about -0.17 of its total potential returns per unit of risk. Houston American Energy is currently generating about 0.03 per unit of volatility. If you would invest 134.00 in Houston American Energy on September 1, 2024 and sell it today you would earn a total of 5.00 from holding Houston American Energy or generate 3.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Camber Energy vs. Houston American Energy
Performance |
| Timeline |
| Camber Energy |
| Houston American Energy |
Camber Energy and Houston American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Camber Energy and Houston American
The main advantage of trading using opposite Camber Energy and Houston American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Camber Energy position performs unexpectedly, Houston American 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 Houston American will offset losses from the drop in Houston American's long position.The idea behind Camber Energy and Houston American Energy 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.| Houston American vs. Indonesia Energy | Houston American vs. Imperial Petroleum | Houston American vs. Nine Energy Service | Houston American vs. Camber 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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