Correlation Between Cardinal Energy and Tourmaline Oil
Can any of the company-specific risk be diversified away by investing in both Cardinal Energy and Tourmaline 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 Cardinal Energy and Tourmaline Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cardinal Energy and Tourmaline Oil Corp, you can compare the effects of market volatilities on Cardinal Energy and Tourmaline 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 Cardinal Energy with a short position of Tourmaline Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cardinal Energy and Tourmaline Oil.
Diversification Opportunities for Cardinal Energy and Tourmaline Oil
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cardinal and Tourmaline is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Cardinal Energy and Tourmaline Oil Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tourmaline Oil Corp and Cardinal 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 Cardinal Energy are associated (or correlated) with Tourmaline Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tourmaline Oil Corp has no effect on the direction of Cardinal Energy i.e., Cardinal Energy and Tourmaline Oil go up and down completely randomly.
Pair Corralation between Cardinal Energy and Tourmaline Oil
Assuming the 90 days horizon Cardinal Energy is expected to generate 1.05 times more return on investment than Tourmaline Oil. However, Cardinal Energy is 1.05 times more volatile than Tourmaline Oil Corp. It trades about 0.03 of its potential returns per unit of risk. Tourmaline Oil Corp is currently generating about 0.03 per unit of risk. If you would invest 450.00 in Cardinal Energy on November 28, 2024 and sell it today you would earn a total of 4.00 from holding Cardinal Energy or generate 0.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cardinal Energy vs. Tourmaline Oil Corp
Performance |
| Timeline |
| Cardinal Energy |
| Tourmaline Oil Corp |
Cardinal Energy and Tourmaline Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cardinal Energy and Tourmaline Oil
The main advantage of trading using opposite Cardinal Energy and Tourmaline Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cardinal Energy position performs unexpectedly, Tourmaline 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 Tourmaline Oil will offset losses from the drop in Tourmaline Oil's long position.| Cardinal Energy vs. Tamarack Valley Energy | Cardinal Energy vs. Pine Cliff Energy | Cardinal Energy vs. MEG Energy Corp | Cardinal Energy vs. Headwater Exploration |
| Tourmaline Oil vs. PrairieSky Royalty | Tourmaline Oil vs. Tamarack Valley Energy | Tourmaline Oil vs. MEG Energy Corp | Tourmaline Oil vs. Cardinal 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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