Correlation Between InPlay Oil and Trican Well
Can any of the company-specific risk be diversified away by investing in both InPlay Oil and Trican Well 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 Trican Well 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 Trican Well Service, you can compare the effects of market volatilities on InPlay Oil and Trican Well 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 Trican Well. Check out your portfolio center. Please also check ongoing floating volatility patterns of InPlay Oil and Trican Well.
Diversification Opportunities for InPlay Oil and Trican Well
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between InPlay and Trican is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding InPlay Oil Corp and Trican Well Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trican Well Service 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 Trican Well. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trican Well Service has no effect on the direction of InPlay Oil i.e., InPlay Oil and Trican Well go up and down completely randomly.
Pair Corralation between InPlay Oil and Trican Well
Assuming the 90 days trading horizon InPlay Oil Corp is expected to under-perform the Trican Well. But the stock apears to be less risky and, when comparing its historical volatility, InPlay Oil Corp is 1.13 times less risky than Trican Well. The stock trades about -0.04 of its potential returns per unit of risk. The Trican Well Service is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 390.00 in Trican Well Service on August 24, 2024 and sell it today you would earn a total of 109.00 from holding Trican Well Service or generate 27.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
InPlay Oil Corp vs. Trican Well Service
Performance |
| Timeline |
| InPlay Oil Corp |
| Trican Well Service |
InPlay Oil and Trican Well Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with InPlay Oil and Trican Well
The main advantage of trading using opposite InPlay Oil and Trican Well positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InPlay Oil position performs unexpectedly, Trican Well 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 Trican Well will offset losses from the drop in Trican Well's long position.| InPlay Oil vs. Trican Well Service | InPlay Oil vs. Ensign Energy Services | InPlay Oil vs. Calfrac Well Services | InPlay Oil vs. Birchcliff Energy |
| Trican Well vs. Calfrac Well Services | Trican Well vs. Precision Drilling | Trican Well vs. Ensign Energy Services | Trican Well vs. Birchcliff 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |