Correlation Between Kelt Exploration and Gear Energy
Can any of the company-specific risk be diversified away by investing in both Kelt Exploration and Gear 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 Gear 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 Gear Energy, you can compare the effects of market volatilities on Kelt Exploration and Gear 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 Gear Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kelt Exploration and Gear Energy.
Diversification Opportunities for Kelt Exploration and Gear Energy
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kelt and Gear is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Kelt Exploration and Gear Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gear 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 Gear Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gear Energy has no effect on the direction of Kelt Exploration i.e., Kelt Exploration and Gear Energy go up and down completely randomly.
Pair Corralation between Kelt Exploration and Gear Energy
Assuming the 90 days horizon Kelt Exploration is expected to generate 0.92 times more return on investment than Gear Energy. However, Kelt Exploration is 1.08 times less risky than Gear Energy. It trades about 0.03 of its potential returns per unit of risk. Gear Energy is currently generating about -0.02 per unit of risk. If you would invest 462.00 in Kelt Exploration on September 1, 2024 and sell it today you would earn a total of 38.00 from holding Kelt Exploration or generate 8.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kelt Exploration vs. Gear Energy
Performance |
| Timeline |
| Kelt Exploration |
| Gear Energy |
Kelt Exploration and Gear Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kelt Exploration and Gear Energy
The main advantage of trading using opposite Kelt Exploration and Gear Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kelt Exploration position performs unexpectedly, Gear 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 Gear Energy will offset losses from the drop in Gear Energy's long position.| Kelt Exploration vs. ROK Resources | Kelt Exploration vs. PetroShale | Kelt Exploration vs. Pieridae Energy Limited | Kelt Exploration vs. Bengal Energy |
| Gear Energy vs. Tamarack Valley Energy | Gear Energy vs. MEG Energy Corp | Gear Energy vs. Cardinal Energy | Gear Energy vs. Whitecap Resources |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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