Correlation Between Canacol Energy and Altura Energy
Can any of the company-specific risk be diversified away by investing in both Canacol Energy and Altura 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 Altura 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 Altura Energy, you can compare the effects of market volatilities on Canacol Energy and Altura 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 Altura Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canacol Energy and Altura Energy.
Diversification Opportunities for Canacol Energy and Altura Energy
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Canacol and Altura is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Canacol Energy and Altura Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altura Energy 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 Altura Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altura Energy has no effect on the direction of Canacol Energy i.e., Canacol Energy and Altura Energy go up and down completely randomly.
Pair Corralation between Canacol Energy and Altura Energy
Assuming the 90 days horizon Canacol Energy is expected to generate 1.56 times less return on investment than Altura Energy. But when comparing it to its historical volatility, Canacol Energy is 1.24 times less risky than Altura Energy. It trades about 0.27 of its potential returns per unit of risk. Altura Energy is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest 691.00 in Altura Energy on August 31, 2024 and sell it today you would earn a total of 336.00 from holding Altura Energy or generate 48.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canacol Energy vs. Altura Energy
Performance |
| Timeline |
| Canacol Energy |
| Altura Energy |
Canacol Energy and Altura Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canacol Energy and Altura Energy
The main advantage of trading using opposite Canacol Energy and Altura Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canacol Energy position performs unexpectedly, Altura 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 Altura Energy will offset losses from the drop in Altura Energy's long position.| Canacol Energy vs. PetroShale | Canacol Energy vs. Inpex Corp ADR | Canacol Energy vs. Battalion Oil Corp | Canacol Energy vs. Condor Petroleum |
| Altura Energy vs. AER Energy Resources | Altura Energy vs. Alamo Energy Corp | Altura Energy vs. Arete Industries | Altura Energy vs. Barrister Energy LLC |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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