Correlation Between Century Petroleum and EGPI Firecreek
Can any of the company-specific risk be diversified away by investing in both Century Petroleum and EGPI Firecreek 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 EGPI Firecreek 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 EGPI Firecreek, you can compare the effects of market volatilities on Century Petroleum and EGPI Firecreek 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 EGPI Firecreek. Check out your portfolio center. Please also check ongoing floating volatility patterns of Century Petroleum and EGPI Firecreek.
Diversification Opportunities for Century Petroleum and EGPI Firecreek
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Century and EGPI is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Century Petroleum Corp and EGPI Firecreek in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EGPI Firecreek 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 EGPI Firecreek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EGPI Firecreek has no effect on the direction of Century Petroleum i.e., Century Petroleum and EGPI Firecreek go up and down completely randomly.
Pair Corralation between Century Petroleum and EGPI Firecreek
If you would invest 0.01 in EGPI Firecreek on September 2, 2024 and sell it today you would earn a total of 0.00 from holding EGPI Firecreek or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 98.44% |
| Values | Daily Returns |
Century Petroleum Corp vs. EGPI Firecreek
Performance |
| Timeline |
| Century Petroleum Corp |
| EGPI Firecreek |
Century Petroleum and EGPI Firecreek Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Century Petroleum and EGPI Firecreek
The main advantage of trading using opposite Century Petroleum and EGPI Firecreek positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Century Petroleum position performs unexpectedly, EGPI Firecreek 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 EGPI Firecreek will offset losses from the drop in EGPI Firecreek's long position.| Century Petroleum vs. Epsilon Energy | Century Petroleum vs. Crescent Energy Co | Century Petroleum vs. Evolution Petroleum | Century Petroleum vs. XXL Energy Corp |
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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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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