Correlation Between Capricorn Energy and Birchcliff Energy
Can any of the company-specific risk be diversified away by investing in both Capricorn Energy and Birchcliff 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 Capricorn Energy and Birchcliff Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capricorn Energy PLC and Birchcliff Energy, you can compare the effects of market volatilities on Capricorn Energy and Birchcliff 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 Capricorn Energy with a short position of Birchcliff Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capricorn Energy and Birchcliff Energy.
Diversification Opportunities for Capricorn Energy and Birchcliff Energy
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Capricorn and Birchcliff is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Capricorn Energy PLC and Birchcliff Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Birchcliff Energy and Capricorn 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 Capricorn Energy PLC are associated (or correlated) with Birchcliff Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Birchcliff Energy has no effect on the direction of Capricorn Energy i.e., Capricorn Energy and Birchcliff Energy go up and down completely randomly.
Pair Corralation between Capricorn Energy and Birchcliff Energy
Assuming the 90 days horizon Capricorn Energy PLC is expected to generate 0.96 times more return on investment than Birchcliff Energy. However, Capricorn Energy PLC is 1.05 times less risky than Birchcliff Energy. It trades about 0.07 of its potential returns per unit of risk. Birchcliff Energy is currently generating about 0.02 per unit of risk. If you would invest 553.00 in Capricorn Energy PLC on August 26, 2024 and sell it today you would earn a total of 17.00 from holding Capricorn Energy PLC or generate 3.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capricorn Energy PLC vs. Birchcliff Energy
Performance |
| Timeline |
| Capricorn Energy PLC |
| Birchcliff Energy |
Capricorn Energy and Birchcliff Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capricorn Energy and Birchcliff Energy
The main advantage of trading using opposite Capricorn Energy and Birchcliff Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capricorn Energy position performs unexpectedly, Birchcliff 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 Birchcliff Energy will offset losses from the drop in Birchcliff Energy's long position.| Capricorn Energy vs. San Leon Energy | Capricorn Energy vs. Tullow Oil PLC | Capricorn Energy vs. Dno ASA | Capricorn Energy vs. PetroShale |
| Birchcliff Energy vs. Tamarack Valley Energy | Birchcliff Energy vs. Peyto ExplorationDevelopment Corp | Birchcliff Energy vs. Gear Energy | Birchcliff Energy vs. Spartan Delta 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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