Correlation Between Century Petroleum and Barrel Energy
Can any of the company-specific risk be diversified away by investing in both Century Petroleum 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 Century Petroleum and Barrel Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Century Petroleum Corp and Barrel Energy, you can compare the effects of market volatilities on Century Petroleum 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 Century Petroleum with a short position of Barrel Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Century Petroleum and Barrel Energy.
Diversification Opportunities for Century Petroleum and Barrel Energy
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Century and Barrel is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Century Petroleum Corp and Barrel Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barrel Energy and Century Petroleum 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 Century Petroleum Corp 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 Century Petroleum i.e., Century Petroleum and Barrel Energy go up and down completely randomly.
Pair Corralation between Century Petroleum 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 | 95.24% |
| Values | Daily Returns |
Century Petroleum Corp vs. Barrel Energy
Performance |
| Timeline |
| Century Petroleum Corp |
| Barrel Energy |
Century Petroleum and Barrel Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Century Petroleum and Barrel Energy
The main advantage of trading using opposite Century Petroleum and Barrel Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Century Petroleum 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.The idea behind Century Petroleum Corp and Barrel Energy pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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