Correlation Between Calima Energy and Barrel Energy
Can any of the company-specific risk be diversified away by investing in both Calima Energy and Barrel 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 Calima Energy and Barrel Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Calima Energy Limited and Barrel Energy, you can compare the effects of market volatilities on Calima Energy and Barrel 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 Calima Energy with a short position of Barrel Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calima Energy and Barrel Energy.
Diversification Opportunities for Calima Energy and Barrel Energy
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Calima and Barrel is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Calima Energy Limited and Barrel Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barrel Energy and Calima 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 Calima Energy Limited are associated (or correlated) with Barrel Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barrel Energy has no effect on the direction of Calima Energy i.e., Calima Energy and Barrel Energy go up and down completely randomly.
Pair Corralation between Calima Energy and Barrel Energy
Assuming the 90 days horizon Calima Energy Limited is expected to generate 4.35 times more return on investment than Barrel Energy. However, Calima Energy is 4.35 times more volatile than Barrel Energy. It trades about 0.06 of its potential returns per unit of risk. Barrel Energy is currently generating about 0.02 per unit of risk. If you would invest 5.50 in Calima Energy Limited on September 12, 2024 and sell it today you would lose (4.25) from holding Calima Energy Limited or give up 77.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Calima Energy Limited vs. Barrel Energy
Performance |
| Timeline |
| Calima Energy Limited |
| Barrel Energy |
Calima Energy and Barrel Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Calima Energy and Barrel Energy
The main advantage of trading using opposite Calima Energy and Barrel Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calima Energy position performs unexpectedly, Barrel 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 Barrel Energy will offset losses from the drop in Barrel Energy's long position.| Calima Energy vs. Buru Energy Limited | Calima Energy vs. Altura Energy | Calima Energy vs. Daybreak Oil and | Calima Energy vs. Arrow Exploration Corp |
| Barrel Energy vs. Permian Resources | Barrel Energy vs. Devon Energy | Barrel Energy vs. EOG Resources | Barrel Energy vs. Coterra 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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