Correlation Between Capricorn Energy and Energean Oil
Can any of the company-specific risk be diversified away by investing in both Capricorn Energy and Energean Oil 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 Capricorn Energy and Energean Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capricorn Energy PLC and Energean Oil Gas, you can compare the effects of market volatilities on Capricorn Energy and Energean Oil 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 Capricorn Energy with a short position of Energean Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capricorn Energy and Energean Oil.
Diversification Opportunities for Capricorn Energy and Energean Oil
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Capricorn and Energean is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Capricorn Energy PLC and Energean Oil Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Energean Oil Gas and Capricorn 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 Capricorn Energy PLC are associated (or correlated) with Energean Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Energean Oil Gas has no effect on the direction of Capricorn Energy i.e., Capricorn Energy and Energean Oil go up and down completely randomly.
Pair Corralation between Capricorn Energy and Energean Oil
Assuming the 90 days trading horizon Capricorn Energy PLC is expected to generate 1.13 times more return on investment than Energean Oil. However, Capricorn Energy is 1.13 times more volatile than Energean Oil Gas. It trades about 0.14 of its potential returns per unit of risk. Energean Oil Gas is currently generating about 0.04 per unit of risk. If you would invest 22,450 in Capricorn Energy PLC on November 2, 2024 and sell it today you would earn a total of 8,950 from holding Capricorn Energy PLC or generate 39.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capricorn Energy PLC vs. Energean Oil Gas
Performance |
| Timeline |
| Capricorn Energy PLC |
| Energean Oil Gas |
Capricorn Energy and Energean Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capricorn Energy and Energean Oil
The main advantage of trading using opposite Capricorn Energy and Energean Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capricorn Energy position performs unexpectedly, Energean Oil 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 Energean Oil will offset losses from the drop in Energean Oil's long position.| Capricorn Energy vs. Zoom Video Communications | Capricorn Energy vs. Enbridge | Capricorn Energy vs. Endo International PLC | Capricorn Energy vs. Cornish Metals |
| Energean Oil vs. Zoom Video Communications | Energean Oil vs. Public Storage | Energean Oil vs. Gaztransport et Technigaz | Energean Oil vs. Ion Beam Applications |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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