Correlation Between Frontera Energy and Tamarack Valley
Can any of the company-specific risk be diversified away by investing in both Frontera 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 Frontera 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 Frontera Energy Corp and Tamarack Valley Energy, you can compare the effects of market volatilities on Frontera 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 Frontera Energy with a short position of Tamarack Valley. Check out your portfolio center. Please also check ongoing floating volatility patterns of Frontera Energy and Tamarack Valley.
Diversification Opportunities for Frontera Energy and Tamarack Valley
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Frontera and Tamarack is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Frontera Energy Corp 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 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 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 Frontera Energy i.e., Frontera Energy and Tamarack Valley go up and down completely randomly.
Pair Corralation between Frontera Energy and Tamarack Valley
Assuming the 90 days horizon Frontera Energy Corp is expected to under-perform the Tamarack Valley. In addition to that, Frontera Energy is 1.58 times more volatile than Tamarack Valley Energy. It trades about -0.28 of its total potential returns per unit of risk. Tamarack Valley Energy is currently generating about -0.38 per unit of volatility. If you would invest 337.00 in Tamarack Valley Energy on November 3, 2024 and sell it today you would lose (32.00) from holding Tamarack Valley Energy or give up 9.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Frontera Energy Corp vs. Tamarack Valley Energy
Performance |
| Timeline |
| Frontera Energy Corp |
| Tamarack Valley Energy |
Frontera Energy and Tamarack Valley Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Frontera Energy and Tamarack Valley
The main advantage of trading using opposite Frontera Energy and Tamarack Valley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Frontera 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.| Frontera Energy vs. CGX Energy | Frontera Energy vs. Athabasca Oil Corp | Frontera Energy vs. Africa Oil Corp | Frontera Energy vs. MEG Energy Corp |
| Tamarack Valley vs. Cedar Realty Trust | Tamarack Valley vs. Alvotech | Tamarack Valley vs. Alto Neuroscience, | Tamarack Valley vs. Titan Machinery |
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 Valuation module to check real value of public entities based on technical and fundamental data.
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