Correlation Between Kelt Exploration and NuVista Energy
Can any of the company-specific risk be diversified away by investing in both Kelt Exploration and NuVista 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 Kelt Exploration and NuVista Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kelt Exploration and NuVista Energy, you can compare the effects of market volatilities on Kelt Exploration and NuVista 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 Kelt Exploration with a short position of NuVista Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kelt Exploration and NuVista Energy.
Diversification Opportunities for Kelt Exploration and NuVista Energy
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kelt and NuVista is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Kelt Exploration and NuVista Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NuVista 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 NuVista Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NuVista Energy has no effect on the direction of Kelt Exploration i.e., Kelt Exploration and NuVista Energy go up and down completely randomly.
Pair Corralation between Kelt Exploration and NuVista Energy
Assuming the 90 days trading horizon Kelt Exploration is expected to generate 1.19 times more return on investment than NuVista Energy. However, Kelt Exploration is 1.19 times more volatile than NuVista Energy. It trades about -0.07 of its potential returns per unit of risk. NuVista Energy is currently generating about -0.22 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 | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Kelt Exploration vs. NuVista Energy
Performance |
| Timeline |
| Kelt Exploration |
| NuVista Energy |
Kelt Exploration and NuVista Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kelt Exploration and NuVista Energy
The main advantage of trading using opposite Kelt Exploration and NuVista Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kelt Exploration position performs unexpectedly, NuVista 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 NuVista Energy will offset losses from the drop in NuVista Energy's long position.| Kelt Exploration vs. NuVista Energy | Kelt Exploration vs. Advantage Oil Gas | Kelt Exploration vs. Birchcliff Energy | Kelt Exploration vs. Cardinal Energy |
| NuVista Energy vs. Tamarack Valley Energy | NuVista Energy vs. Birchcliff Energy | NuVista Energy vs. MEG Energy 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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