Correlation Between E Split and Tourmaline Oil
Can any of the company-specific risk be diversified away by investing in both E Split and Tourmaline 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 Tourmaline 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 Tourmaline Oil Corp, you can compare the effects of market volatilities on E Split and Tourmaline 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 Tourmaline Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of E Split and Tourmaline Oil.
Diversification Opportunities for E Split and Tourmaline Oil
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ENS and Tourmaline is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding E Split Corp and Tourmaline Oil Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tourmaline Oil Corp 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 Tourmaline Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tourmaline Oil Corp has no effect on the direction of E Split i.e., E Split and Tourmaline Oil go up and down completely randomly.
Pair Corralation between E Split and Tourmaline Oil
Assuming the 90 days trading horizon E Split Corp is expected to generate 1.06 times more return on investment than Tourmaline Oil. However, E Split is 1.06 times more volatile than Tourmaline Oil Corp. It trades about -0.01 of its potential returns per unit of risk. Tourmaline Oil Corp is currently generating about -0.15 per unit of risk. If you would invest 1,433 in E Split Corp on November 9, 2024 and sell it today you would lose (6.00) from holding E Split Corp or give up 0.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
E Split Corp vs. Tourmaline Oil Corp
Performance |
| Timeline |
| E Split Corp |
| Tourmaline Oil Corp |
E Split and Tourmaline Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with E Split and Tourmaline Oil
The main advantage of trading using opposite E Split and Tourmaline Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if E Split position performs unexpectedly, Tourmaline 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 Tourmaline Oil will offset losses from the drop in Tourmaline Oil's long position.| E Split vs. Global Dividend Growth | E Split vs. Real Estate E Commerce | E Split vs. Life Banc Split | E Split vs. Brompton Split Banc |
| Tourmaline Oil vs. ARC Resources | Tourmaline Oil vs. Whitecap Resources | Tourmaline Oil vs. MEG Energy Corp | Tourmaline Oil vs. Birchcliff 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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