Correlation Between Kelt Exploration and Advantage Oil
Can any of the company-specific risk be diversified away by investing in both Kelt Exploration and Advantage Oil 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 Kelt Exploration and Advantage Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kelt Exploration and Advantage Oil Gas, you can compare the effects of market volatilities on Kelt Exploration and Advantage Oil 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 Kelt Exploration with a short position of Advantage Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kelt Exploration and Advantage Oil.
Diversification Opportunities for Kelt Exploration and Advantage Oil
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Kelt and Advantage is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Kelt Exploration and Advantage Oil Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advantage Oil Gas and Kelt Exploration 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 Kelt Exploration are associated (or correlated) with Advantage Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advantage Oil Gas has no effect on the direction of Kelt Exploration i.e., Kelt Exploration and Advantage Oil go up and down completely randomly.
Pair Corralation between Kelt Exploration and Advantage Oil
Assuming the 90 days trading horizon Kelt Exploration is expected to generate 1.11 times more return on investment than Advantage Oil. However, Kelt Exploration is 1.11 times more volatile than Advantage Oil Gas. It trades about -0.07 of its potential returns per unit of risk. Advantage Oil Gas is currently generating about -0.23 per unit of risk. If you would invest 710.00 in Kelt Exploration on November 3, 2024 and sell it today you would lose (22.00) from holding Kelt Exploration or give up 3.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kelt Exploration vs. Advantage Oil Gas
Performance |
| Timeline |
| Kelt Exploration |
| Advantage Oil Gas |
Kelt Exploration and Advantage Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kelt Exploration and Advantage Oil
The main advantage of trading using opposite Kelt Exploration and Advantage Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kelt Exploration position performs unexpectedly, Advantage Oil 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 Advantage Oil will offset losses from the drop in Advantage Oil's long position.| Kelt Exploration vs. NuVista Energy | Kelt Exploration vs. Advantage Oil Gas | Kelt Exploration vs. Birchcliff Energy | Kelt Exploration vs. Cardinal Energy |
| Advantage Oil vs. Birchcliff Energy | Advantage Oil vs. NuVista Energy | Advantage Oil vs. Kelt Exploration | Advantage Oil vs. Peyto ExplorationDevelopment Corp |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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