Correlation Between E Split and TAG Oil
Can any of the company-specific risk be diversified away by investing in both E Split and TAG Oil 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 E Split and TAG Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between E Split Corp and TAG Oil, you can compare the effects of market volatilities on E Split and TAG Oil 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 E Split with a short position of TAG Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of E Split and TAG Oil.
Diversification Opportunities for E Split and TAG Oil
Modest diversification
The 3 months correlation between ENS-PA and TAG is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding E Split Corp and TAG Oil in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TAG Oil and E Split 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 E Split Corp are associated (or correlated) with TAG Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TAG Oil has no effect on the direction of E Split i.e., E Split and TAG Oil go up and down completely randomly.
Pair Corralation between E Split and TAG Oil
Assuming the 90 days trading horizon E Split Corp is expected to generate 0.14 times more return on investment than TAG Oil. However, E Split Corp is 7.18 times less risky than TAG Oil. It trades about -0.02 of its potential returns per unit of risk. TAG Oil is currently generating about -0.07 per unit of risk. If you would invest 1,120 in E Split Corp on January 13, 2025 and sell it today you would lose (6.00) from holding E Split Corp or give up 0.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
E Split Corp vs. TAG Oil
Performance |
| Timeline |
| E Split Corp |
| TAG Oil |
E Split and TAG Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with E Split and TAG Oil
The main advantage of trading using opposite E Split and TAG Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if E Split position performs unexpectedly, TAG Oil 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 TAG Oil will offset losses from the drop in TAG Oil's long position.| E Split vs. Enbridge Pref 5 | E Split vs. Enbridge Pref 11 | E Split vs. Enbridge Pref L | E Split vs. E Split Corp |
| TAG Oil vs. Southern Energy Corp | TAG Oil vs. ShaMaran Petroleum Corp | TAG Oil vs. Tenaz Energy Corp | TAG Oil vs. Hemisphere 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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