Correlation Between Houston American and Camber Energy
Can any of the company-specific risk be diversified away by investing in both Houston American 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 Houston American and Camber Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Houston American Energy and Camber Energy, you can compare the effects of market volatilities on Houston American 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 Houston American with a short position of Camber Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Houston American and Camber Energy.
Diversification Opportunities for Houston American and Camber Energy
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Houston and Camber is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Houston American Energy and Camber Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Camber Energy and Houston American 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 Houston American Energy 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 Houston American i.e., Houston American and Camber Energy go up and down completely randomly.
Pair Corralation between Houston American and Camber Energy
Given the investment horizon of 90 days Houston American Energy is expected to generate 0.74 times more return on investment than Camber Energy. However, Houston American Energy is 1.35 times less risky than Camber Energy. It trades about 0.03 of its potential returns per unit of risk. Camber Energy is currently generating about -0.17 per unit of risk. If you would invest 134.00 in Houston American Energy on September 1, 2024 and sell it today you would earn a total of 5.00 from holding Houston American Energy or generate 3.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Houston American Energy vs. Camber Energy
Performance |
| Timeline |
| Houston American Energy |
| Camber Energy |
Houston American and Camber Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Houston American and Camber Energy
The main advantage of trading using opposite Houston American and Camber Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Houston American 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.| Houston American vs. Indonesia Energy | Houston American vs. Imperial Petroleum | Houston American vs. Nine Energy Service | Houston American vs. Camber 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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