Correlation Between Ngx Energy and Pine Cliff
Can any of the company-specific risk be diversified away by investing in both Ngx Energy and Pine Cliff 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 Ngx Energy and Pine Cliff into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ngx Energy International and Pine Cliff Energy, you can compare the effects of market volatilities on Ngx Energy and Pine Cliff 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 Ngx Energy with a short position of Pine Cliff. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ngx Energy and Pine Cliff.
Diversification Opportunities for Ngx Energy and Pine Cliff
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ngx and Pine is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Ngx Energy International and Pine Cliff Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pine Cliff Energy and Ngx 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 Ngx Energy International are associated (or correlated) with Pine Cliff. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pine Cliff Energy has no effect on the direction of Ngx Energy i.e., Ngx Energy and Pine Cliff go up and down completely randomly.
Pair Corralation between Ngx Energy and Pine Cliff
Assuming the 90 days horizon Ngx Energy International is expected to generate 1.91 times more return on investment than Pine Cliff. However, Ngx Energy is 1.91 times more volatile than Pine Cliff Energy. It trades about -0.06 of its potential returns per unit of risk. Pine Cliff Energy is currently generating about -0.26 per unit of risk. If you would invest 78.00 in Ngx Energy International on November 3, 2024 and sell it today you would lose (3.00) from holding Ngx Energy International or give up 3.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Ngx Energy International vs. Pine Cliff Energy
Performance |
| Timeline |
| Ngx Energy International |
| Pine Cliff Energy |
Ngx Energy and Pine Cliff Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ngx Energy and Pine Cliff
The main advantage of trading using opposite Ngx Energy and Pine Cliff positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ngx Energy position performs unexpectedly, Pine Cliff 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 Pine Cliff will offset losses from the drop in Pine Cliff's long position.| Ngx Energy vs. Trillion Energy International | Ngx Energy vs. Bengal Energy | Ngx Energy vs. ROK Resources | Ngx Energy vs. Pieridae Energy Limited |
| Pine Cliff vs. Athabasca Oil Corp | Pine Cliff vs. Cardinal Energy | Pine Cliff vs. Tamarack Valley Energy | Pine Cliff vs. Saturn Oil Gas |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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