Correlation Between Gulf Coast and Camber Energy
Can any of the company-specific risk be diversified away by investing in both Gulf Coast and Camber 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 Gulf Coast and Camber Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gulf Coast and Camber Energy, you can compare the effects of market volatilities on Gulf Coast and Camber 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 Gulf Coast with a short position of Camber Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gulf Coast and Camber Energy.
Diversification Opportunities for Gulf Coast and Camber Energy
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Gulf and Camber is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Gulf Coast and Camber Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Camber Energy and Gulf Coast 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 Gulf Coast are associated (or correlated) with Camber Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Camber Energy has no effect on the direction of Gulf Coast i.e., Gulf Coast and Camber Energy go up and down completely randomly.
Pair Corralation between Gulf Coast and Camber Energy
Assuming the 90 days horizon Gulf Coast is expected to generate 0.81 times more return on investment than Camber Energy. However, Gulf Coast is 1.23 times less risky than Camber Energy. It trades about 0.47 of its potential returns per unit of risk. Camber Energy is currently generating about -0.13 per unit of risk. If you would invest 1.20 in Gulf Coast on August 30, 2024 and sell it today you would earn a total of 0.70 from holding Gulf Coast or generate 58.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gulf Coast vs. Camber Energy
Performance |
| Timeline |
| Gulf Coast |
| Camber Energy |
Gulf Coast and Camber Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gulf Coast and Camber Energy
The main advantage of trading using opposite Gulf Coast and Camber Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gulf Coast position performs unexpectedly, Camber 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 Camber Energy will offset losses from the drop in Camber Energy's long position.| Gulf Coast vs. San Leon Energy | Gulf Coast vs. Enwell Energy plc | Gulf Coast vs. Dno ASA | Gulf Coast vs. PetroShale |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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