Correlation Between Frontera Energy and Invictus Energy
Can any of the company-specific risk be diversified away by investing in both Frontera Energy and Invictus Energy 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 Invictus Energy 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 Invictus Energy Limited, you can compare the effects of market volatilities on Frontera Energy and Invictus Energy 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 Invictus Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Frontera Energy and Invictus Energy.
Diversification Opportunities for Frontera Energy and Invictus Energy
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Frontera and Invictus is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Frontera Energy Corp and Invictus Energy Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invictus Energy 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 Invictus Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invictus Energy has no effect on the direction of Frontera Energy i.e., Frontera Energy and Invictus Energy go up and down completely randomly.
Pair Corralation between Frontera Energy and Invictus Energy
Assuming the 90 days horizon Frontera Energy Corp is expected to generate 0.38 times more return on investment than Invictus Energy. However, Frontera Energy Corp is 2.61 times less risky than Invictus Energy. It trades about -0.04 of its potential returns per unit of risk. Invictus Energy Limited is currently generating about -0.04 per unit of risk. If you would invest 844.00 in Frontera Energy Corp on September 1, 2024 and sell it today you would lose (265.00) from holding Frontera Energy Corp or give up 31.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.63% |
| Values | Daily Returns |
Frontera Energy Corp vs. Invictus Energy Limited
Performance |
| Timeline |
| Frontera Energy Corp |
| Invictus Energy |
Frontera Energy and Invictus Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Frontera Energy and Invictus Energy
The main advantage of trading using opposite Frontera Energy and Invictus Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Frontera Energy position performs unexpectedly, Invictus Energy 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 Invictus Energy will offset losses from the drop in Invictus Energy's long position.| Frontera Energy vs. Petroleo Brasileiro Petrobras | Frontera Energy vs. Equinor ASA ADR | Frontera Energy vs. Eni SpA ADR | Frontera Energy vs. YPF Sociedad Anonima |
| Invictus Energy vs. Sintana Energy | Invictus Energy vs. 88 Energy Limited | Invictus Energy vs. Journey Energy | Invictus Energy vs. Trillion Energy International |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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