Correlation Between Invictus Energy and Cardinal Energy
Can any of the company-specific risk be diversified away by investing in both Invictus Energy and Cardinal 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 Invictus Energy and Cardinal Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invictus Energy Limited and Cardinal Energy, you can compare the effects of market volatilities on Invictus Energy and Cardinal 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 Invictus Energy with a short position of Cardinal Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invictus Energy and Cardinal Energy.
Diversification Opportunities for Invictus Energy and Cardinal Energy
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Invictus and Cardinal is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Invictus Energy Limited and Cardinal Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cardinal Energy and Invictus Energy 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 Invictus Energy Limited are associated (or correlated) with Cardinal Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cardinal Energy has no effect on the direction of Invictus Energy i.e., Invictus Energy and Cardinal Energy go up and down completely randomly.
Pair Corralation between Invictus Energy and Cardinal Energy
Assuming the 90 days horizon Invictus Energy Limited is expected to under-perform the Cardinal Energy. In addition to that, Invictus Energy is 3.9 times more volatile than Cardinal Energy. It trades about -0.07 of its total potential returns per unit of risk. Cardinal Energy is currently generating about 0.12 per unit of volatility. If you would invest 465.00 in Cardinal Energy on August 25, 2024 and sell it today you would earn a total of 17.00 from holding Cardinal Energy or generate 3.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Invictus Energy Limited vs. Cardinal Energy
Performance |
| Timeline |
| Invictus Energy |
| Cardinal Energy |
Invictus Energy and Cardinal Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invictus Energy and Cardinal Energy
The main advantage of trading using opposite Invictus Energy and Cardinal Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invictus Energy position performs unexpectedly, Cardinal 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 Cardinal Energy will offset losses from the drop in Cardinal Energy's long position.| Invictus Energy vs. Sintana Energy | Invictus Energy vs. 88 Energy Limited | Invictus Energy vs. Journey Energy | Invictus Energy vs. Trillion Energy International |
| Cardinal Energy vs. Petroleo Brasileiro Petrobras | Cardinal Energy vs. Equinor ASA ADR | Cardinal Energy vs. Eni SpA ADR | Cardinal Energy vs. YPF Sociedad Anonima |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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