Correlation Between InPlay Oil and Condor Petroleum
Can any of the company-specific risk be diversified away by investing in both InPlay Oil and Condor Petroleum 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 Condor Petroleum 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 Condor Petroleum, you can compare the effects of market volatilities on InPlay Oil and Condor Petroleum 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 Condor Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of InPlay Oil and Condor Petroleum.
Diversification Opportunities for InPlay Oil and Condor Petroleum
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between InPlay and Condor is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding InPlay Oil Corp and Condor Petroleum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Condor Petroleum 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 Condor Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Condor Petroleum has no effect on the direction of InPlay Oil i.e., InPlay Oil and Condor Petroleum go up and down completely randomly.
Pair Corralation between InPlay Oil and Condor Petroleum
Assuming the 90 days horizon InPlay Oil Corp is expected to under-perform the Condor Petroleum. But the otc stock apears to be less risky and, when comparing its historical volatility, InPlay Oil Corp is 2.26 times less risky than Condor Petroleum. The otc stock trades about -0.11 of its potential returns per unit of risk. The Condor Petroleum is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 144.00 in Condor Petroleum on September 3, 2024 and sell it today you would earn a total of 17.00 from holding Condor Petroleum or generate 11.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
InPlay Oil Corp vs. Condor Petroleum
Performance |
| Timeline |
| InPlay Oil Corp |
| Condor Petroleum |
InPlay Oil and Condor Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with InPlay Oil and Condor Petroleum
The main advantage of trading using opposite InPlay Oil and Condor Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InPlay Oil position performs unexpectedly, Condor Petroleum 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 Condor Petroleum will offset losses from the drop in Condor Petroleum's long position.| InPlay Oil vs. Petrus Resources | InPlay Oil vs. Hemisphere Energy | InPlay Oil vs. Headwater Exploration | InPlay Oil vs. Surge Energy |
| Condor Petroleum vs. Canacol Energy | Condor Petroleum vs. InPlay Oil Corp | Condor Petroleum vs. Cardinal Energy | Condor Petroleum vs. Freehold Royalties |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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