Correlation Between Canacol Energy and Whitecap Resources
Can any of the company-specific risk be diversified away by investing in both Canacol Energy and Whitecap Resources 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 Whitecap Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canacol Energy and Whitecap Resources, you can compare the effects of market volatilities on Canacol Energy and Whitecap Resources 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 Whitecap Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canacol Energy and Whitecap Resources.
Diversification Opportunities for Canacol Energy and Whitecap Resources
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Canacol and Whitecap is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Canacol Energy and Whitecap Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Whitecap Resources 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 Whitecap Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Whitecap Resources has no effect on the direction of Canacol Energy i.e., Canacol Energy and Whitecap Resources go up and down completely randomly.
Pair Corralation between Canacol Energy and Whitecap Resources
Assuming the 90 days horizon Canacol Energy is expected to under-perform the Whitecap Resources. In addition to that, Canacol Energy is 1.94 times more volatile than Whitecap Resources. It trades about -0.05 of its total potential returns per unit of risk. Whitecap Resources is currently generating about 0.02 per unit of volatility. If you would invest 704.00 in Whitecap Resources on September 1, 2024 and sell it today you would earn a total of 24.00 from holding Whitecap Resources or generate 3.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.26% |
| Values | Daily Returns |
Canacol Energy vs. Whitecap Resources
Performance |
| Timeline |
| Canacol Energy |
| Whitecap Resources |
Canacol Energy and Whitecap Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canacol Energy and Whitecap Resources
The main advantage of trading using opposite Canacol Energy and Whitecap Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canacol Energy position performs unexpectedly, Whitecap Resources 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 Whitecap Resources will offset losses from the drop in Whitecap Resources' long position.| Canacol Energy vs. PetroShale | Canacol Energy vs. Inpex Corp ADR | Canacol Energy vs. Battalion Oil Corp | Canacol Energy vs. Condor Petroleum |
| Whitecap Resources vs. Athabasca Oil Corp | Whitecap Resources vs. Headwater Exploration | Whitecap Resources vs. Tamarack Valley Energy | Whitecap Resources vs. Birchcliff 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
Other Complementary Tools
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas |