Correlation Between Cardinal Energy and Birchcliff Energy
Can any of the company-specific risk be diversified away by investing in both Cardinal Energy and Birchcliff 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 Cardinal Energy and Birchcliff Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cardinal Energy and Birchcliff Energy, you can compare the effects of market volatilities on Cardinal Energy and Birchcliff 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 Cardinal Energy with a short position of Birchcliff Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cardinal Energy and Birchcliff Energy.
Diversification Opportunities for Cardinal Energy and Birchcliff Energy
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cardinal and Birchcliff is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Cardinal Energy and Birchcliff Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Birchcliff Energy and Cardinal 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 Cardinal Energy are associated (or correlated) with Birchcliff Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Birchcliff Energy has no effect on the direction of Cardinal Energy i.e., Cardinal Energy and Birchcliff Energy go up and down completely randomly.
Pair Corralation between Cardinal Energy and Birchcliff Energy
Assuming the 90 days horizon Cardinal Energy is expected to generate 0.52 times more return on investment than Birchcliff Energy. However, Cardinal Energy is 1.91 times less risky than Birchcliff Energy. It trades about 0.16 of its potential returns per unit of risk. Birchcliff Energy is currently generating about 0.04 per unit of risk. If you would invest 647.00 in Cardinal Energy on August 25, 2024 and sell it today you would earn a total of 26.00 from holding Cardinal Energy or generate 4.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cardinal Energy vs. Birchcliff Energy
Performance |
| Timeline |
| Cardinal Energy |
| Birchcliff Energy |
Cardinal Energy and Birchcliff Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cardinal Energy and Birchcliff Energy
The main advantage of trading using opposite Cardinal Energy and Birchcliff Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cardinal Energy position performs unexpectedly, Birchcliff 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 Birchcliff Energy will offset losses from the drop in Birchcliff Energy's long position.| Cardinal Energy vs. Tamarack Valley Energy | Cardinal Energy vs. Gear Energy | Cardinal Energy vs. Whitecap Resources | Cardinal Energy vs. Athabasca Oil Corp |
| Birchcliff Energy vs. Trican Well Service | Birchcliff Energy vs. Ensign Energy Services | Birchcliff Energy vs. Calfrac Well Services |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |