Correlation Between Canacol Energy and Battalion Oil
Can any of the company-specific risk be diversified away by investing in both Canacol Energy and Battalion 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 Canacol Energy and Battalion Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canacol Energy and Battalion Oil Corp, you can compare the effects of market volatilities on Canacol Energy and Battalion 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 Canacol Energy with a short position of Battalion Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canacol Energy and Battalion Oil.
Diversification Opportunities for Canacol Energy and Battalion Oil
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Canacol and Battalion is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Canacol Energy and Battalion Oil Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Battalion Oil 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 Battalion Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Battalion Oil Corp has no effect on the direction of Canacol Energy i.e., Canacol Energy and Battalion Oil go up and down completely randomly.
Pair Corralation between Canacol Energy and Battalion Oil
Assuming the 90 days horizon Canacol Energy is expected to under-perform the Battalion Oil. But the otc stock apears to be less risky and, when comparing its historical volatility, Canacol Energy is 2.98 times less risky than Battalion Oil. The otc stock trades about -0.05 of its potential returns per unit of risk. The Battalion Oil Corp is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 606.00 in Battalion Oil Corp on November 3, 2024 and sell it today you would lose (421.00) from holding Battalion Oil Corp or give up 69.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Canacol Energy vs. Battalion Oil Corp
Performance |
| Timeline |
| Canacol Energy |
| Battalion Oil Corp |
Canacol Energy and Battalion Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canacol Energy and Battalion Oil
The main advantage of trading using opposite Canacol Energy and Battalion Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canacol Energy position performs unexpectedly, Battalion 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 Battalion Oil will offset losses from the drop in Battalion Oil's long position.| Canacol Energy vs. PetroShale | Canacol Energy vs. Inpex Corp ADR | Canacol Energy vs. Battalion Oil Corp | Canacol Energy vs. Condor Petroleum |
| Battalion Oil vs. Epsilon Energy | Battalion Oil vs. Citizens Community Bancorp | Battalion Oil vs. Perma Pipe International Holdings | Battalion Oil vs. Amplify Energy Corp |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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