Correlation Between Daybreak Oil and Calima Energy
Can any of the company-specific risk be diversified away by investing in both Daybreak Oil and Calima 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 Daybreak Oil and Calima Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daybreak Oil and and Calima Energy Limited, you can compare the effects of market volatilities on Daybreak Oil and Calima 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 Daybreak Oil with a short position of Calima Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daybreak Oil and Calima Energy.
Diversification Opportunities for Daybreak Oil and Calima Energy
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Daybreak and Calima is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Daybreak Oil and and Calima Energy Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calima Energy Limited and Daybreak Oil 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 Daybreak Oil and are associated (or correlated) with Calima Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calima Energy Limited has no effect on the direction of Daybreak Oil i.e., Daybreak Oil and Calima Energy go up and down completely randomly.
Pair Corralation between Daybreak Oil and Calima Energy
Given the investment horizon of 90 days Daybreak Oil is expected to generate 1.06 times less return on investment than Calima Energy. In addition to that, Daybreak Oil is 1.01 times more volatile than Calima Energy Limited. It trades about 0.05 of its total potential returns per unit of risk. Calima Energy Limited is currently generating about 0.06 per unit of volatility. If you would invest 5.09 in Calima Energy Limited on August 28, 2024 and sell it today you would lose (3.84) from holding Calima Energy Limited or give up 75.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daybreak Oil and vs. Calima Energy Limited
Performance |
| Timeline |
| Daybreak Oil |
| Calima Energy Limited |
Daybreak Oil and Calima Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daybreak Oil and Calima Energy
The main advantage of trading using opposite Daybreak Oil and Calima Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daybreak Oil position performs unexpectedly, Calima 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 Calima Energy will offset losses from the drop in Calima Energy's long position.| Daybreak Oil vs. Barrister Energy LLC | Daybreak Oil vs. Buru Energy Limited | Daybreak Oil vs. Altura Energy | Daybreak Oil vs. Arrow Exploration Corp |
| Calima Energy vs. Buru Energy Limited | Calima Energy vs. Altura Energy | Calima Energy vs. Daybreak Oil and | Calima Energy vs. Arrow Exploration 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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