Correlation Between Frontera Energy and Total Helium
Can any of the company-specific risk be diversified away by investing in both Frontera Energy and Total Helium 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 Total Helium 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 Total Helium, you can compare the effects of market volatilities on Frontera Energy and Total Helium 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 Total Helium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Frontera Energy and Total Helium.
Diversification Opportunities for Frontera Energy and Total Helium
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Frontera and Total is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Frontera Energy Corp and Total Helium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Total Helium 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 Total Helium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Total Helium has no effect on the direction of Frontera Energy i.e., Frontera Energy and Total Helium go up and down completely randomly.
Pair Corralation between Frontera Energy and Total Helium
Assuming the 90 days horizon Frontera Energy Corp is expected to under-perform the Total Helium. But the pink sheet apears to be less risky and, when comparing its historical volatility, Frontera Energy Corp is 7.0 times less risky than Total Helium. The pink sheet trades about -0.06 of its potential returns per unit of risk. The Total Helium is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1.47 in Total Helium on August 26, 2024 and sell it today you would lose (0.07) from holding Total Helium or give up 4.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Frontera Energy Corp vs. Total Helium
Performance |
| Timeline |
| Frontera Energy Corp |
| Total Helium |
Frontera Energy and Total Helium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Frontera Energy and Total Helium
The main advantage of trading using opposite Frontera Energy and Total Helium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Frontera Energy position performs unexpectedly, Total Helium 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 Total Helium will offset losses from the drop in Total Helium'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 |
| Total Helium vs. Permian Resources | Total Helium vs. Devon Energy | Total Helium vs. EOG Resources | Total Helium vs. Coterra 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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