Correlation Between MEG Energy and Tourmaline Oil
Can any of the company-specific risk be diversified away by investing in both MEG Energy and Tourmaline Oil 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 MEG Energy and Tourmaline Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MEG Energy Corp and Tourmaline Oil Corp, you can compare the effects of market volatilities on MEG Energy and Tourmaline Oil 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 MEG Energy with a short position of Tourmaline Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of MEG Energy and Tourmaline Oil.
Diversification Opportunities for MEG Energy and Tourmaline Oil
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between MEG and Tourmaline is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding MEG Energy Corp and Tourmaline Oil Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tourmaline Oil Corp and MEG Energy 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 MEG Energy Corp are associated (or correlated) with Tourmaline Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tourmaline Oil Corp has no effect on the direction of MEG Energy i.e., MEG Energy and Tourmaline Oil go up and down completely randomly.
Pair Corralation between MEG Energy and Tourmaline Oil
Assuming the 90 days horizon MEG Energy Corp is expected to under-perform the Tourmaline Oil. In addition to that, MEG Energy is 1.22 times more volatile than Tourmaline Oil Corp. It trades about -0.06 of its total potential returns per unit of risk. Tourmaline Oil Corp is currently generating about 0.01 per unit of volatility. If you would invest 4,754 in Tourmaline Oil Corp on November 28, 2024 and sell it today you would lose (35.00) from holding Tourmaline Oil Corp or give up 0.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MEG Energy Corp vs. Tourmaline Oil Corp
Performance |
| Timeline |
| MEG Energy Corp |
| Tourmaline Oil Corp |
MEG Energy and Tourmaline Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MEG Energy and Tourmaline Oil
The main advantage of trading using opposite MEG Energy and Tourmaline Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MEG Energy position performs unexpectedly, Tourmaline Oil 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 Tourmaline Oil will offset losses from the drop in Tourmaline Oil's long position.| MEG Energy vs. Tamarack Valley Energy | MEG Energy vs. Cardinal Energy | MEG Energy vs. Whitecap Resources | MEG Energy vs. Spartan Delta Corp |
| Tourmaline Oil vs. PrairieSky Royalty | Tourmaline Oil vs. Tamarack Valley Energy | Tourmaline Oil vs. MEG Energy Corp | Tourmaline Oil vs. Cardinal Energy |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites |