Correlation Between MEG Energy and Valeura Energy
Can any of the company-specific risk be diversified away by investing in both MEG Energy and Valeura 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 MEG Energy and Valeura Energy 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 Valeura Energy, you can compare the effects of market volatilities on MEG Energy and Valeura 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 MEG Energy with a short position of Valeura Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of MEG Energy and Valeura Energy.
Diversification Opportunities for MEG Energy and Valeura Energy
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between MEG and Valeura is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding MEG Energy Corp and Valeura Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Valeura Energy 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 Valeura Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Valeura Energy has no effect on the direction of MEG Energy i.e., MEG Energy and Valeura Energy go up and down completely randomly.
Pair Corralation between MEG Energy and Valeura Energy
Assuming the 90 days horizon MEG Energy Corp is expected to under-perform the Valeura Energy. But the pink sheet apears to be less risky and, when comparing its historical volatility, MEG Energy Corp is 1.58 times less risky than Valeura Energy. The pink sheet trades about -0.04 of its potential returns per unit of risk. The Valeura Energy is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 532.00 in Valeura Energy on November 27, 2024 and sell it today you would earn a total of 23.00 from holding Valeura Energy or generate 4.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MEG Energy Corp vs. Valeura Energy
Performance |
| Timeline |
| MEG Energy Corp |
| Valeura Energy |
MEG Energy and Valeura Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MEG Energy and Valeura Energy
The main advantage of trading using opposite MEG Energy and Valeura Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MEG Energy position performs unexpectedly, Valeura 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 Valeura Energy will offset losses from the drop in Valeura Energy'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 |
| Valeura Energy vs. Paysafe | Valeura Energy vs. Kuya Silver | Valeura Energy vs. Molecular Partners AG | Valeura Energy vs. NETGEAR |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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