Correlation Between Empire Petroleum and Canadian Natural
Can any of the company-specific risk be diversified away by investing in both Empire Petroleum and Canadian Natural 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 Empire Petroleum and Canadian Natural into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Empire Petroleum Corp and Canadian Natural Resources, you can compare the effects of market volatilities on Empire Petroleum and Canadian Natural 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 Empire Petroleum with a short position of Canadian Natural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Empire Petroleum and Canadian Natural.
Diversification Opportunities for Empire Petroleum and Canadian Natural
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Empire and Canadian is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Empire Petroleum Corp and Canadian Natural Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canadian Natural Res and Empire 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 Empire Petroleum Corp are associated (or correlated) with Canadian Natural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canadian Natural Res has no effect on the direction of Empire Petroleum i.e., Empire Petroleum and Canadian Natural go up and down completely randomly.
Pair Corralation between Empire Petroleum and Canadian Natural
Allowing for the 90-day total investment horizon Empire Petroleum Corp is expected to generate 2.48 times more return on investment than Canadian Natural. However, Empire Petroleum is 2.48 times more volatile than Canadian Natural Resources. It trades about 0.09 of its potential returns per unit of risk. Canadian Natural Resources is currently generating about -0.13 per unit of risk. If you would invest 627.00 in Empire Petroleum Corp on September 14, 2024 and sell it today you would earn a total of 42.00 from holding Empire Petroleum Corp or generate 6.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Empire Petroleum Corp vs. Canadian Natural Resources
Performance |
| Timeline |
| Empire Petroleum Corp |
| Canadian Natural Res |
Empire Petroleum and Canadian Natural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Empire Petroleum and Canadian Natural
The main advantage of trading using opposite Empire Petroleum and Canadian Natural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Empire Petroleum position performs unexpectedly, Canadian Natural 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 Canadian Natural will offset losses from the drop in Canadian Natural's long position.| Empire Petroleum vs. PHX Minerals | Empire Petroleum vs. Mexco Energy | Empire Petroleum vs. Granite Ridge Resources | Empire Petroleum vs. XXL Energy Corp |
| Canadian Natural vs. Baytex Energy Corp | Canadian Natural vs. Vermilion Energy | Canadian Natural vs. Obsidian Energy | Canadian Natural vs. Ovintiv |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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