Correlation Between Journey Energy and ProAm Explorations
Can any of the company-specific risk be diversified away by investing in both Journey Energy and ProAm Explorations 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 Journey Energy and ProAm Explorations into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Journey Energy and ProAm Explorations Corp, you can compare the effects of market volatilities on Journey Energy and ProAm Explorations 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 Journey Energy with a short position of ProAm Explorations. Check out your portfolio center. Please also check ongoing floating volatility patterns of Journey Energy and ProAm Explorations.
Diversification Opportunities for Journey Energy and ProAm Explorations
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Journey and ProAm is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Journey Energy and ProAm Explorations Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProAm Explorations Corp and Journey 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 Journey Energy are associated (or correlated) with ProAm Explorations. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProAm Explorations Corp has no effect on the direction of Journey Energy i.e., Journey Energy and ProAm Explorations go up and down completely randomly.
Pair Corralation between Journey Energy and ProAm Explorations
Assuming the 90 days trading horizon Journey Energy is expected to generate 0.28 times more return on investment than ProAm Explorations. However, Journey Energy is 3.58 times less risky than ProAm Explorations. It trades about 0.04 of its potential returns per unit of risk. ProAm Explorations Corp is currently generating about -0.12 per unit of risk. If you would invest 213.00 in Journey Energy on September 5, 2024 and sell it today you would earn a total of 4.00 from holding Journey Energy or generate 1.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Journey Energy vs. ProAm Explorations Corp
Performance |
| Timeline |
| Journey Energy |
| ProAm Explorations Corp |
Journey Energy and ProAm Explorations Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Journey Energy and ProAm Explorations
The main advantage of trading using opposite Journey Energy and ProAm Explorations positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Journey Energy position performs unexpectedly, ProAm Explorations 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 ProAm Explorations will offset losses from the drop in ProAm Explorations' long position.| Journey Energy vs. Gear Energy | Journey Energy vs. InPlay Oil Corp | Journey Energy vs. Headwater Exploration | Journey Energy vs. Cardinal Energy |
| ProAm Explorations vs. Gear Energy | ProAm Explorations vs. Journey Energy | ProAm Explorations vs. Yangarra Resources | ProAm Explorations vs. Pine Cliff 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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