Correlation Between Barrister Energy and CGX Energy
Can any of the company-specific risk be diversified away by investing in both Barrister Energy and CGX 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 Barrister Energy and CGX Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barrister Energy LLC and CGX Energy, you can compare the effects of market volatilities on Barrister Energy and CGX 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 Barrister Energy with a short position of CGX Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barrister Energy and CGX Energy.
Diversification Opportunities for Barrister Energy and CGX Energy
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Barrister and CGX is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Barrister Energy LLC and CGX Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CGX Energy and Barrister 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 Barrister Energy LLC are associated (or correlated) with CGX Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CGX Energy has no effect on the direction of Barrister Energy i.e., Barrister Energy and CGX Energy go up and down completely randomly.
Pair Corralation between Barrister Energy and CGX Energy
Given the investment horizon of 90 days Barrister Energy is expected to generate 3.45 times less return on investment than CGX Energy. But when comparing it to its historical volatility, Barrister Energy LLC is 7.72 times less risky than CGX Energy. It trades about 0.22 of its potential returns per unit of risk. CGX Energy is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 10.00 in CGX Energy on November 3, 2024 and sell it today you would earn a total of 1.00 from holding CGX Energy or generate 10.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Barrister Energy LLC vs. CGX Energy
Performance |
| Timeline |
| Barrister Energy LLC |
| CGX Energy |
Barrister Energy and CGX Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barrister Energy and CGX Energy
The main advantage of trading using opposite Barrister Energy and CGX Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barrister Energy position performs unexpectedly, CGX 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 CGX Energy will offset losses from the drop in CGX Energy's long position.| Barrister Energy vs. Buru Energy Limited | Barrister Energy vs. Altura Energy | Barrister Energy vs. Daybreak Oil and | Barrister Energy vs. Arrow Exploration Corp |
| CGX Energy vs. Avanti Energy | CGX Energy vs. Desert Mountain Energy | CGX Energy vs. Royal Helium | CGX Energy vs. Eco Oil Gas |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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