Correlation Between Canacol Energy and Alamo Energy
Can any of the company-specific risk be diversified away by investing in both Canacol Energy and Alamo 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 Canacol Energy and Alamo Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canacol Energy and Alamo Energy Corp, you can compare the effects of market volatilities on Canacol Energy and Alamo 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 Canacol Energy with a short position of Alamo Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canacol Energy and Alamo Energy.
Diversification Opportunities for Canacol Energy and Alamo Energy
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Canacol and Alamo is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Canacol Energy and Alamo Energy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alamo Energy Corp and Canacol 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 Canacol Energy are associated (or correlated) with Alamo Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alamo Energy Corp has no effect on the direction of Canacol Energy i.e., Canacol Energy and Alamo Energy go up and down completely randomly.
Pair Corralation between Canacol Energy and Alamo Energy
Assuming the 90 days horizon Canacol Energy is expected to generate 7.55 times less return on investment than Alamo Energy. But when comparing it to its historical volatility, Canacol Energy is 3.72 times less risky than Alamo Energy. It trades about 0.03 of its potential returns per unit of risk. Alamo Energy Corp is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 0.01 in Alamo Energy Corp on August 28, 2024 and sell it today you would earn a total of 0.00 from holding Alamo Energy Corp or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.78% |
| Values | Daily Returns |
Canacol Energy vs. Alamo Energy Corp
Performance |
| Timeline |
| Canacol Energy |
| Alamo Energy Corp |
Canacol Energy and Alamo Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canacol Energy and Alamo Energy
The main advantage of trading using opposite Canacol Energy and Alamo Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canacol Energy position performs unexpectedly, Alamo 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 Alamo Energy will offset losses from the drop in Alamo Energy's long position.| Canacol Energy vs. Petroleo Brasileiro Petrobras | Canacol Energy vs. Equinor ASA ADR | Canacol Energy vs. Eni SpA ADR | Canacol Energy vs. YPF Sociedad Anonima |
| Alamo Energy vs. AER Energy Resources | Alamo Energy vs. Altura Energy | Alamo Energy vs. Arete Industries | Alamo Energy vs. Strat Petroleum |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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