Correlation Between InPlay Oil and Gran Tierra
Can any of the company-specific risk be diversified away by investing in both InPlay Oil and Gran Tierra 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 InPlay Oil and Gran Tierra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between InPlay Oil Corp and Gran Tierra Energy, you can compare the effects of market volatilities on InPlay Oil and Gran Tierra 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 InPlay Oil with a short position of Gran Tierra. Check out your portfolio center. Please also check ongoing floating volatility patterns of InPlay Oil and Gran Tierra.
Diversification Opportunities for InPlay Oil and Gran Tierra
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between InPlay and Gran is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding InPlay Oil Corp and Gran Tierra Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gran Tierra Energy and InPlay Oil 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 InPlay Oil Corp are associated (or correlated) with Gran Tierra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gran Tierra Energy has no effect on the direction of InPlay Oil i.e., InPlay Oil and Gran Tierra go up and down completely randomly.
Pair Corralation between InPlay Oil and Gran Tierra
Assuming the 90 days trading horizon InPlay Oil Corp is expected to under-perform the Gran Tierra. But the stock apears to be less risky and, when comparing its historical volatility, InPlay Oil Corp is 1.18 times less risky than Gran Tierra. The stock trades about -0.09 of its potential returns per unit of risk. The Gran Tierra Energy is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 824.00 in Gran Tierra Energy on August 26, 2024 and sell it today you would earn a total of 69.00 from holding Gran Tierra Energy or generate 8.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
InPlay Oil Corp vs. Gran Tierra Energy
Performance |
| Timeline |
| InPlay Oil Corp |
| Gran Tierra Energy |
InPlay Oil and Gran Tierra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with InPlay Oil and Gran Tierra
The main advantage of trading using opposite InPlay Oil and Gran Tierra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InPlay Oil position performs unexpectedly, Gran Tierra 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 Gran Tierra will offset losses from the drop in Gran Tierra's long position.| InPlay Oil vs. Gear Energy | InPlay Oil vs. Journey Energy | InPlay Oil vs. Yangarra Resources | InPlay Oil vs. Obsidian Energy |
| Gran Tierra vs. InPlay Oil Corp | Gran Tierra vs. Yangarra Resources | Gran Tierra vs. iShares Canadian HYBrid | Gran Tierra vs. Altagas Cum Red |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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