Correlation Between Canadian Natural and InPlay Oil
Can any of the company-specific risk be diversified away by investing in both Canadian Natural and InPlay 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 Canadian Natural and InPlay Oil 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 InPlay Oil Corp, you can compare the effects of market volatilities on Canadian Natural and InPlay 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 Canadian Natural with a short position of InPlay Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canadian Natural and InPlay Oil.
Diversification Opportunities for Canadian Natural and InPlay Oil
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Canadian and InPlay is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Canadian Natural Resources and InPlay Oil Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InPlay Oil 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 InPlay Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of InPlay Oil Corp has no effect on the direction of Canadian Natural i.e., Canadian Natural and InPlay Oil go up and down completely randomly.
Pair Corralation between Canadian Natural and InPlay Oil
Assuming the 90 days trading horizon Canadian Natural Resources is expected to generate 0.83 times more return on investment than InPlay Oil. However, Canadian Natural Resources is 1.2 times less risky than InPlay Oil. It trades about 0.03 of its potential returns per unit of risk. InPlay Oil Corp is currently generating about -0.04 per unit of risk. If you would invest 3,655 in Canadian Natural Resources on November 27, 2024 and sell it today you would earn a total of 534.00 from holding Canadian Natural Resources or generate 14.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canadian Natural Resources vs. InPlay Oil Corp
Performance |
| Timeline |
| Canadian Natural Res |
| InPlay Oil Corp |
Canadian Natural and InPlay Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canadian Natural and InPlay Oil
The main advantage of trading using opposite Canadian Natural and InPlay Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canadian Natural position performs unexpectedly, InPlay 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 InPlay Oil will offset losses from the drop in InPlay Oil's long position.| Canadian Natural vs. Suncor Energy | Canadian Natural vs. Cenovus Energy | Canadian Natural vs. TC Energy Corp | Canadian Natural vs. Enbridge |
| InPlay Oil vs. Journey Energy | InPlay Oil vs. Yangarra Resources | InPlay Oil vs. Obsidian Energy | InPlay Oil vs. Pine Cliff 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments |