Correlation Between Kelt Exploration and MEG Energy
Can any of the company-specific risk be diversified away by investing in both Kelt Exploration and MEG 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 MEG 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 MEG Energy Corp, you can compare the effects of market volatilities on Kelt Exploration and MEG 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 MEG Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kelt Exploration and MEG Energy.
Diversification Opportunities for Kelt Exploration and MEG Energy
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Kelt and MEG is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Kelt Exploration and MEG Energy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MEG 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 MEG Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MEG Energy Corp has no effect on the direction of Kelt Exploration i.e., Kelt Exploration and MEG Energy go up and down completely randomly.
Pair Corralation between Kelt Exploration and MEG Energy
Assuming the 90 days horizon Kelt Exploration is expected to under-perform the MEG Energy. In addition to that, Kelt Exploration is 1.11 times more volatile than MEG Energy Corp. It trades about -0.16 of its total potential returns per unit of risk. MEG Energy Corp is currently generating about -0.04 per unit of volatility. If you would invest 1,620 in MEG Energy Corp on November 27, 2024 and sell it today you would lose (39.00) from holding MEG Energy Corp or give up 2.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kelt Exploration vs. MEG Energy Corp
Performance |
| Timeline |
| Kelt Exploration |
| MEG Energy Corp |
Kelt Exploration and MEG Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kelt Exploration and MEG Energy
The main advantage of trading using opposite Kelt Exploration and MEG Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kelt Exploration position performs unexpectedly, MEG 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 MEG Energy will offset losses from the drop in MEG Energy's long position.| Kelt Exploration vs. ROK Resources | Kelt Exploration vs. PetroShale | Kelt Exploration vs. Pieridae Energy Limited | Kelt Exploration vs. Bengal Energy |
| MEG Energy vs. Tamarack Valley Energy | MEG Energy vs. Cardinal Energy | MEG Energy vs. Whitecap Resources | MEG Energy vs. Spartan Delta 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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