Correlation Between Canadian Natural and Baselode Energy
Can any of the company-specific risk be diversified away by investing in both Canadian Natural and Baselode 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 Canadian Natural and Baselode Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canadian Natural Resources and Baselode Energy Corp, you can compare the effects of market volatilities on Canadian Natural and Baselode 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 Canadian Natural with a short position of Baselode Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canadian Natural and Baselode Energy.
Diversification Opportunities for Canadian Natural and Baselode Energy
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Canadian and Baselode is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Canadian Natural Resources and Baselode Energy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baselode Energy Corp and Canadian Natural 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 Canadian Natural Resources are associated (or correlated) with Baselode Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baselode Energy Corp has no effect on the direction of Canadian Natural i.e., Canadian Natural and Baselode Energy go up and down completely randomly.
Pair Corralation between Canadian Natural and Baselode Energy
Assuming the 90 days trading horizon Canadian Natural Resources is expected to generate 0.31 times more return on investment than Baselode Energy. However, Canadian Natural Resources is 3.28 times less risky than Baselode Energy. It trades about 0.03 of its potential returns per unit of risk. Baselode Energy Corp is currently generating about -0.06 per unit of risk. If you would invest 4,352 in Canadian Natural Resources on September 1, 2024 and sell it today you would earn a total of 400.00 from holding Canadian Natural Resources or generate 9.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canadian Natural Resources vs. Baselode Energy Corp
Performance |
| Timeline |
| Canadian Natural Res |
| Baselode Energy Corp |
Canadian Natural and Baselode Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canadian Natural and Baselode Energy
The main advantage of trading using opposite Canadian Natural and Baselode Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canadian Natural position performs unexpectedly, Baselode 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 Baselode Energy will offset losses from the drop in Baselode Energy's long position.| Canadian Natural vs. Suncor Energy | Canadian Natural vs. Cenovus Energy | Canadian Natural vs. TC Energy Corp | Canadian Natural vs. Enbridge |
| Baselode Energy vs. MTY Food Group | Baselode Energy vs. Definity Financial Corp | Baselode Energy vs. CI Financial Corp | Baselode Energy vs. Renoworks Software |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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