Correlation Between Continental Energy and Barrel Energy
Can any of the company-specific risk be diversified away by investing in both Continental Energy and Barrel 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 Continental Energy and Barrel Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Continental Energy and Barrel Energy, you can compare the effects of market volatilities on Continental Energy and Barrel 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 Continental Energy with a short position of Barrel Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Continental Energy and Barrel Energy.
Diversification Opportunities for Continental Energy and Barrel Energy
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Continental and Barrel is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Continental Energy and Barrel Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barrel Energy and Continental Energy 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 Continental Energy are associated (or correlated) with Barrel Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barrel Energy has no effect on the direction of Continental Energy i.e., Continental Energy and Barrel Energy go up and down completely randomly.
Pair Corralation between Continental Energy and Barrel Energy
If you would invest 0.25 in Barrel Energy on September 14, 2024 and sell it today you would earn a total of 0.00 from holding Barrel Energy or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Continental Energy vs. Barrel Energy
Performance |
| Timeline |
| Continental Energy |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Barrel Energy |
Continental Energy and Barrel Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Continental Energy and Barrel Energy
The main advantage of trading using opposite Continental Energy and Barrel Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Continental Energy position performs unexpectedly, Barrel 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 Barrel Energy will offset losses from the drop in Barrel Energy's long position.| Continental Energy vs. Strat Petroleum | Continental Energy vs. Imperial Res | Continental Energy vs. Century Petroleum Corp |
| Barrel Energy vs. Saturn Oil Gas | Barrel Energy vs. Foothills Exploration | Barrel Energy vs. Calima Energy Limited | Barrel Energy vs. New Frontier 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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