Correlation Between Canadian Natural and Trio Petroleum
Can any of the company-specific risk be diversified away by investing in both Canadian Natural and Trio Petroleum 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 Trio Petroleum 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 Trio Petroleum Corp, you can compare the effects of market volatilities on Canadian Natural and Trio Petroleum 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 Trio Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canadian Natural and Trio Petroleum.
Diversification Opportunities for Canadian Natural and Trio Petroleum
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Canadian and Trio is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Canadian Natural Resources and Trio Petroleum Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trio Petroleum 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 Trio Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trio Petroleum Corp has no effect on the direction of Canadian Natural i.e., Canadian Natural and Trio Petroleum go up and down completely randomly.
Pair Corralation between Canadian Natural and Trio Petroleum
Considering the 90-day investment horizon Canadian Natural Resources is expected to generate 0.17 times more return on investment than Trio Petroleum. However, Canadian Natural Resources is 5.99 times less risky than Trio Petroleum. It trades about -0.06 of its potential returns per unit of risk. Trio Petroleum Corp is currently generating about -0.44 per unit of risk. If you would invest 3,425 in Canadian Natural Resources on September 4, 2024 and sell it today you would lose (67.00) from holding Canadian Natural Resources or give up 1.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canadian Natural Resources vs. Trio Petroleum Corp
Performance |
| Timeline |
| Canadian Natural Res |
| Trio Petroleum Corp |
Canadian Natural and Trio Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canadian Natural and Trio Petroleum
The main advantage of trading using opposite Canadian Natural and Trio Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canadian Natural position performs unexpectedly, Trio Petroleum 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 Trio Petroleum will offset losses from the drop in Trio Petroleum's long position.| Canadian Natural vs. Baytex Energy Corp | Canadian Natural vs. Vermilion Energy | Canadian Natural vs. Obsidian Energy | Canadian Natural vs. Ovintiv |
| Trio Petroleum vs. Where Food Comes | Trio Petroleum vs. Q2 Holdings | Trio Petroleum vs. VirnetX Holding Corp | Trio Petroleum vs. Asure 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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