Correlation Between Frontera Energy and Spartan Delta
Can any of the company-specific risk be diversified away by investing in both Frontera Energy and Spartan Delta 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 Frontera Energy and Spartan Delta into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Frontera Energy Corp and Spartan Delta Corp, you can compare the effects of market volatilities on Frontera Energy and Spartan Delta 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 Frontera Energy with a short position of Spartan Delta. Check out your portfolio center. Please also check ongoing floating volatility patterns of Frontera Energy and Spartan Delta.
Diversification Opportunities for Frontera Energy and Spartan Delta
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Frontera and Spartan is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Frontera Energy Corp and Spartan Delta Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spartan Delta Corp and Frontera 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 Frontera Energy Corp are associated (or correlated) with Spartan Delta. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spartan Delta Corp has no effect on the direction of Frontera Energy i.e., Frontera Energy and Spartan Delta go up and down completely randomly.
Pair Corralation between Frontera Energy and Spartan Delta
Assuming the 90 days horizon Frontera Energy Corp is expected to generate 0.6 times more return on investment than Spartan Delta. However, Frontera Energy Corp is 1.67 times less risky than Spartan Delta. It trades about -0.02 of its potential returns per unit of risk. Spartan Delta Corp is currently generating about -0.09 per unit of risk. If you would invest 569.00 in Frontera Energy Corp on August 29, 2024 and sell it today you would lose (6.00) from holding Frontera Energy Corp or give up 1.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Frontera Energy Corp vs. Spartan Delta Corp
Performance |
| Timeline |
| Frontera Energy Corp |
| Spartan Delta Corp |
Frontera Energy and Spartan Delta Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Frontera Energy and Spartan Delta
The main advantage of trading using opposite Frontera Energy and Spartan Delta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Frontera Energy position performs unexpectedly, Spartan Delta 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 Spartan Delta will offset losses from the drop in Spartan Delta's long position.| Frontera Energy vs. CGX Energy | Frontera Energy vs. Athabasca Oil Corp | Frontera Energy vs. Africa Oil Corp | Frontera Energy vs. MEG Energy Corp |
| Spartan Delta vs. Tamarack Valley Energy | Spartan Delta vs. Headwater Exploration | Spartan Delta vs. Cardinal Energy | Spartan Delta vs. Kelt Exploration |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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