Correlation Between Kelt Exploration and Gran Tierra
Can any of the company-specific risk be diversified away by investing in both Kelt Exploration and Gran Tierra 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 Gran Tierra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kelt Exploration and Gran Tierra Energy, you can compare the effects of market volatilities on Kelt Exploration and Gran Tierra 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 Gran Tierra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kelt Exploration and Gran Tierra.
Diversification Opportunities for Kelt Exploration and Gran Tierra
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Kelt and Gran is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Kelt Exploration and Gran Tierra Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gran Tierra Energy 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 Gran Tierra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gran Tierra Energy has no effect on the direction of Kelt Exploration i.e., Kelt Exploration and Gran Tierra go up and down completely randomly.
Pair Corralation between Kelt Exploration and Gran Tierra
Assuming the 90 days trading horizon Kelt Exploration is expected to generate 0.84 times more return on investment than Gran Tierra. However, Kelt Exploration is 1.19 times less risky than Gran Tierra. It trades about 0.09 of its potential returns per unit of risk. Gran Tierra Energy is currently generating about 0.03 per unit of risk. If you would invest 666.00 in Kelt Exploration on August 26, 2024 and sell it today you would earn a total of 27.00 from holding Kelt Exploration or generate 4.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kelt Exploration vs. Gran Tierra Energy
Performance |
| Timeline |
| Kelt Exploration |
| Gran Tierra Energy |
Kelt Exploration and Gran Tierra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kelt Exploration and Gran Tierra
The main advantage of trading using opposite Kelt Exploration and Gran Tierra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kelt Exploration position performs unexpectedly, Gran Tierra 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 Gran Tierra will offset losses from the drop in Gran Tierra's long position.| Kelt Exploration vs. InPlay Oil Corp | Kelt Exploration vs. Yangarra Resources | Kelt Exploration vs. iShares Canadian HYBrid | Kelt Exploration vs. Altagas Cum Red |
| Gran Tierra vs. InPlay Oil Corp | Gran Tierra vs. Yangarra Resources | Gran Tierra vs. iShares Canadian HYBrid | Gran Tierra vs. Altagas Cum Red |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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