Correlation Between Index Oil and Canadian Natural
Can any of the company-specific risk be diversified away by investing in both Index Oil and Canadian Natural 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 Index Oil and Canadian Natural into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Index Oil and and Canadian Natural Resources, you can compare the effects of market volatilities on Index Oil and Canadian Natural 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 Index Oil with a short position of Canadian Natural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Index Oil and Canadian Natural.
Diversification Opportunities for Index Oil and Canadian Natural
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Index and Canadian is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Index Oil and and Canadian Natural Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canadian Natural Res and Index 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 Index Oil and are associated (or correlated) with Canadian Natural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canadian Natural Res has no effect on the direction of Index Oil i.e., Index Oil and Canadian Natural go up and down completely randomly.
Pair Corralation between Index Oil and Canadian Natural
If you would invest 0.07 in Index Oil and on August 30, 2024 and sell it today you would earn a total of 0.00 from holding Index Oil and or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Index Oil and vs. Canadian Natural Resources
Performance |
| Timeline |
| Index Oil |
| Canadian Natural Res |
Index Oil and Canadian Natural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Index Oil and Canadian Natural
The main advantage of trading using opposite Index Oil and Canadian Natural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Index Oil position performs unexpectedly, Canadian Natural 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 Canadian Natural will offset losses from the drop in Canadian Natural's long position.| Index Oil vs. Baytex Energy Corp | Index Oil vs. Ovintiv | Index Oil vs. Obsidian Energy | Index Oil vs. Canadian Natural Resources |
| Canadian Natural vs. Devon Energy | Canadian Natural vs. ConocoPhillips | Canadian Natural vs. Diamondback Energy | Canadian Natural vs. Occidental Petroleum |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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