Correlation Between Crew Energy and PetroShale
Can any of the company-specific risk be diversified away by investing in both Crew Energy and PetroShale 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 Crew Energy and PetroShale into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Crew Energy and PetroShale, you can compare the effects of market volatilities on Crew Energy and PetroShale 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 Crew Energy with a short position of PetroShale. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crew Energy and PetroShale.
Diversification Opportunities for Crew Energy and PetroShale
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Crew and PetroShale is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Crew Energy and PetroShale in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PetroShale and Crew 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 Crew Energy are associated (or correlated) with PetroShale. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PetroShale has no effect on the direction of Crew Energy i.e., Crew Energy and PetroShale go up and down completely randomly.
Pair Corralation between Crew Energy and PetroShale
Assuming the 90 days horizon Crew Energy is expected to generate 1.43 times more return on investment than PetroShale. However, Crew Energy is 1.43 times more volatile than PetroShale. It trades about 0.03 of its potential returns per unit of risk. PetroShale is currently generating about -0.01 per unit of risk. If you would invest 412.00 in Crew Energy on September 2, 2024 and sell it today you would earn a total of 139.00 from holding Crew Energy or generate 33.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 91.94% |
| Values | Daily Returns |
Crew Energy vs. PetroShale
Performance |
| Timeline |
| Crew Energy |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
| PetroShale |
Crew Energy and PetroShale Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Crew Energy and PetroShale
The main advantage of trading using opposite Crew Energy and PetroShale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crew Energy position performs unexpectedly, PetroShale 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 PetroShale will offset losses from the drop in PetroShale's long position.| Crew Energy vs. Surge Energy | Crew Energy vs. Athabasca Oil Corp | Crew Energy vs. Birchcliff Energy | Crew Energy vs. Tamarack Valley Energy |
| PetroShale vs. Dno ASA | PetroShale vs. Horizon Oil Limited | PetroShale vs. Enwell Energy plc | PetroShale vs. Tullow Oil plc |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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