Correlation Between Cardinal Energy and Baytex Energy
Can any of the company-specific risk be diversified away by investing in both Cardinal 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 Cardinal 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 Cardinal Energy and Baytex Energy Corp, you can compare the effects of market volatilities on Cardinal 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 Cardinal Energy with a short position of Baytex Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cardinal Energy and Baytex Energy.
Diversification Opportunities for Cardinal Energy and Baytex Energy
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cardinal and Baytex is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Cardinal 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 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 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 Cardinal Energy i.e., Cardinal Energy and Baytex Energy go up and down completely randomly.
Pair Corralation between Cardinal Energy and Baytex Energy
Assuming the 90 days horizon Cardinal Energy is expected to generate 0.45 times more return on investment than Baytex Energy. However, Cardinal Energy is 2.21 times less risky than Baytex Energy. It trades about 0.18 of its potential returns per unit of risk. Baytex Energy Corp is currently generating about 0.01 per unit of risk. If you would invest 639.00 in Cardinal Energy on August 29, 2024 and sell it today you would earn a total of 26.00 from holding Cardinal Energy or generate 4.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cardinal Energy vs. Baytex Energy Corp
Performance |
| Timeline |
| Cardinal Energy |
| Baytex Energy Corp |
Cardinal Energy and Baytex Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cardinal Energy and Baytex Energy
The main advantage of trading using opposite Cardinal Energy and Baytex Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cardinal 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.| Cardinal Energy vs. Tamarack Valley Energy | Cardinal Energy vs. Gear Energy | Cardinal Energy vs. Whitecap Resources | Cardinal Energy vs. Athabasca Oil Corp |
| Baytex Energy vs. Yangarra Resources | Baytex Energy vs. iShares Canadian HYBrid | Baytex Energy vs. Altagas Cum Red | Baytex Energy vs. European Residential Real |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world |