Correlation Between Frontera Energy and Kelt Exploration
Can any of the company-specific risk be diversified away by investing in both Frontera Energy and Kelt Exploration 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 Kelt Exploration 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 Kelt Exploration, you can compare the effects of market volatilities on Frontera Energy and Kelt Exploration 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 Kelt Exploration. Check out your portfolio center. Please also check ongoing floating volatility patterns of Frontera Energy and Kelt Exploration.
Diversification Opportunities for Frontera Energy and Kelt Exploration
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Frontera and Kelt is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Frontera Energy Corp and Kelt Exploration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kelt Exploration 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 Kelt Exploration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kelt Exploration has no effect on the direction of Frontera Energy i.e., Frontera Energy and Kelt Exploration go up and down completely randomly.
Pair Corralation between Frontera Energy and Kelt Exploration
Assuming the 90 days horizon Frontera Energy Corp is expected to under-perform the Kelt Exploration. In addition to that, Frontera Energy is 1.11 times more volatile than Kelt Exploration. It trades about -0.04 of its total potential returns per unit of risk. Kelt Exploration is currently generating about -0.01 per unit of volatility. If you would invest 584.00 in Kelt Exploration on September 1, 2024 and sell it today you would lose (84.00) from holding Kelt Exploration or give up 14.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Frontera Energy Corp vs. Kelt Exploration
Performance |
| Timeline |
| Frontera Energy Corp |
| Kelt Exploration |
Frontera Energy and Kelt Exploration Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Frontera Energy and Kelt Exploration
The main advantage of trading using opposite Frontera Energy and Kelt Exploration positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Frontera Energy position performs unexpectedly, Kelt Exploration 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 Kelt Exploration will offset losses from the drop in Kelt Exploration'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 |
| Kelt Exploration vs. ROK Resources | Kelt Exploration vs. PetroShale | Kelt Exploration vs. Pieridae Energy Limited | Kelt Exploration vs. Bengal 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 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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