Correlation Between Condor Petroleum and Canacol Energy
Can any of the company-specific risk be diversified away by investing in both Condor Petroleum and Canacol 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 Condor Petroleum and Canacol Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Condor Petroleum and Canacol Energy, you can compare the effects of market volatilities on Condor Petroleum and Canacol 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 Condor Petroleum with a short position of Canacol Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Condor Petroleum and Canacol Energy.
Diversification Opportunities for Condor Petroleum and Canacol Energy
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Condor and Canacol is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Condor Petroleum and Canacol Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canacol Energy and Condor Petroleum 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 Condor Petroleum are associated (or correlated) with Canacol Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canacol Energy has no effect on the direction of Condor Petroleum i.e., Condor Petroleum and Canacol Energy go up and down completely randomly.
Pair Corralation between Condor Petroleum and Canacol Energy
Assuming the 90 days horizon Condor Petroleum is expected to generate 0.59 times more return on investment than Canacol Energy. However, Condor Petroleum is 1.69 times less risky than Canacol Energy. It trades about 0.08 of its potential returns per unit of risk. Canacol Energy is currently generating about 0.03 per unit of risk. If you would invest 30.00 in Condor Petroleum on August 30, 2024 and sell it today you would earn a total of 123.00 from holding Condor Petroleum or generate 410.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 97.78% |
| Values | Daily Returns |
Condor Petroleum vs. Canacol Energy
Performance |
| Timeline |
| Condor Petroleum |
| Canacol Energy |
Condor Petroleum and Canacol Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Condor Petroleum and Canacol Energy
The main advantage of trading using opposite Condor Petroleum and Canacol Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Condor Petroleum position performs unexpectedly, Canacol 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 Canacol Energy will offset losses from the drop in Canacol Energy's long position.| Condor Petroleum vs. Yamaha Motor Co | Condor Petroleum vs. Nitto Denko Corp | Condor Petroleum vs. Farmers Merchants Bancorp | Condor Petroleum vs. Furukawa Electric Co |
| Canacol Energy vs. Yamaha Motor Co | Canacol Energy vs. Nitto Denko Corp | Canacol Energy vs. Farmers Merchants Bancorp | Canacol Energy vs. Furukawa Electric Co |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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