Correlation Between Kelt Exploration and Frontera Energy
Can any of the company-specific risk be diversified away by investing in both Kelt Exploration and Frontera 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 Frontera 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 Frontera Energy Corp, you can compare the effects of market volatilities on Kelt Exploration and Frontera 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 Frontera Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kelt Exploration and Frontera Energy.
Diversification Opportunities for Kelt Exploration and Frontera Energy
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Kelt and Frontera is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Kelt Exploration and Frontera Energy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Frontera Energy Corp 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 Frontera Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Frontera Energy Corp has no effect on the direction of Kelt Exploration i.e., Kelt Exploration and Frontera Energy go up and down completely randomly.
Pair Corralation between Kelt Exploration and Frontera Energy
Assuming the 90 days horizon Kelt Exploration is expected to generate 1.23 times more return on investment than Frontera Energy. However, Kelt Exploration is 1.23 times more volatile than Frontera Energy Corp. It trades about 0.11 of its potential returns per unit of risk. Frontera Energy Corp is currently generating about -0.02 per unit of risk. If you would invest 478.00 in Kelt Exploration on August 29, 2024 and sell it today you would earn a total of 22.00 from holding Kelt Exploration or generate 4.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Kelt Exploration vs. Frontera Energy Corp
Performance |
| Timeline |
| Kelt Exploration |
| Frontera Energy Corp |
Kelt Exploration and Frontera Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kelt Exploration and Frontera Energy
The main advantage of trading using opposite Kelt Exploration and Frontera Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kelt Exploration position performs unexpectedly, Frontera 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 Frontera Energy will offset losses from the drop in Frontera Energy's long position.| Kelt Exploration vs. Yamaha Motor Co | Kelt Exploration vs. Nitto Denko Corp | Kelt Exploration vs. Farmers Merchants Bancorp | Kelt Exploration vs. Furukawa Electric Co |
| Frontera Energy vs. CGX Energy | Frontera Energy vs. Athabasca Oil Corp | Frontera Energy vs. Africa Oil Corp | Frontera 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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