Correlation Between Epsilon Energy and Tamarack Valley
Can any of the company-specific risk be diversified away by investing in both Epsilon Energy and Tamarack Valley 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 Epsilon Energy and Tamarack Valley into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Epsilon Energy and Tamarack Valley Energy, you can compare the effects of market volatilities on Epsilon Energy and Tamarack Valley 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 Epsilon Energy with a short position of Tamarack Valley. Check out your portfolio center. Please also check ongoing floating volatility patterns of Epsilon Energy and Tamarack Valley.
Diversification Opportunities for Epsilon Energy and Tamarack Valley
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Epsilon and Tamarack is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Epsilon Energy and Tamarack Valley Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tamarack Valley Energy and Epsilon Energy 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 Epsilon Energy are associated (or correlated) with Tamarack Valley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tamarack Valley Energy has no effect on the direction of Epsilon Energy i.e., Epsilon Energy and Tamarack Valley go up and down completely randomly.
Pair Corralation between Epsilon Energy and Tamarack Valley
Given the investment horizon of 90 days Epsilon Energy is expected to under-perform the Tamarack Valley. But the stock apears to be less risky and, when comparing its historical volatility, Epsilon Energy is 1.02 times less risky than Tamarack Valley. The stock trades about -0.01 of its potential returns per unit of risk. The Tamarack Valley Energy is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 280.00 in Tamarack Valley Energy on August 30, 2024 and sell it today you would earn a total of 33.00 from holding Tamarack Valley Energy or generate 11.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Epsilon Energy vs. Tamarack Valley Energy
Performance |
| Timeline |
| Epsilon Energy |
| Tamarack Valley Energy |
Epsilon Energy and Tamarack Valley Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Epsilon Energy and Tamarack Valley
The main advantage of trading using opposite Epsilon Energy and Tamarack Valley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Epsilon Energy position performs unexpectedly, Tamarack Valley 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 Tamarack Valley will offset losses from the drop in Tamarack Valley's long position.| Epsilon Energy vs. Vaalco Energy | Epsilon Energy vs. PHX Minerals | Epsilon Energy vs. Northern Oil Gas | Epsilon Energy vs. Granite Ridge Resources |
| Tamarack Valley vs. Yamaha Motor Co | Tamarack Valley vs. Nitto Denko Corp | Tamarack Valley vs. Farmers Merchants Bancorp | Tamarack Valley vs. Furukawa Electric Co |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world |