Correlation Between Coastal Caribbean and US Energy
Can any of the company-specific risk be diversified away by investing in both Coastal Caribbean and US 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 Coastal Caribbean and US Energy 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 US Energy Corp, you can compare the effects of market volatilities on Coastal Caribbean and US 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 Coastal Caribbean with a short position of US Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coastal Caribbean and US Energy.
Diversification Opportunities for Coastal Caribbean and US Energy
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Coastal and USEG is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Coastal Caribbean Oils and US Energy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US Energy Corp 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 US Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US Energy Corp has no effect on the direction of Coastal Caribbean i.e., Coastal Caribbean and US Energy go up and down completely randomly.
Pair Corralation between Coastal Caribbean and US Energy
If you would invest 165.00 in US Energy Corp on November 4, 2024 and sell it today you would earn a total of 54.00 from holding US Energy Corp or generate 32.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 5.0% |
| Values | Daily Returns |
Coastal Caribbean Oils vs. US Energy Corp
Performance |
| Timeline |
| Coastal Caribbean Oils |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| US Energy Corp |
Coastal Caribbean and US Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coastal Caribbean and US Energy
The main advantage of trading using opposite Coastal Caribbean and US Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coastal Caribbean position performs unexpectedly, US 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 US Energy will offset losses from the drop in US Energy's long position.| Coastal Caribbean vs. Strat Petroleum | Coastal Caribbean vs. Imperial Res | Coastal Caribbean vs. Century Petroleum Corp |
| US Energy vs. PEDEVCO Corp | US Energy vs. Houston American Energy | US Energy vs. PHX Minerals | US Energy vs. Trio Petroleum Corp |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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