Correlation Between Coastal Caribbean and Houston American
Can any of the company-specific risk be diversified away by investing in both Coastal Caribbean and Houston American 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 Coastal Caribbean and Houston American into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coastal Caribbean Oils and Houston American Energy, you can compare the effects of market volatilities on Coastal Caribbean and Houston American 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 Coastal Caribbean with a short position of Houston American. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coastal Caribbean and Houston American.
Diversification Opportunities for Coastal Caribbean and Houston American
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Coastal and Houston is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Coastal Caribbean Oils and Houston American Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Houston American Energy and Coastal Caribbean 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 Coastal Caribbean Oils are associated (or correlated) with Houston American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Houston American Energy has no effect on the direction of Coastal Caribbean i.e., Coastal Caribbean and Houston American go up and down completely randomly.
Pair Corralation between Coastal Caribbean and Houston American
If you would invest 134.00 in Houston American Energy on August 27, 2024 and sell it today you would earn a total of 12.00 from holding Houston American Energy or generate 8.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Coastal Caribbean Oils vs. Houston American Energy
Performance |
| Timeline |
| Coastal Caribbean Oils |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Houston American Energy |
Coastal Caribbean and Houston American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coastal Caribbean and Houston American
The main advantage of trading using opposite Coastal Caribbean and Houston American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coastal Caribbean position performs unexpectedly, Houston American 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 Houston American will offset losses from the drop in Houston American's long position.| Coastal Caribbean vs. Strat Petroleum | Coastal Caribbean vs. Imperial Res | Coastal Caribbean vs. Century Petroleum Corp |
| Houston American vs. Indonesia Energy | Houston American vs. Imperial Petroleum | Houston American vs. Enservco Co | Houston American vs. Nine Energy Service |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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