Correlation Between New Source and Calima Energy
Can any of the company-specific risk be diversified away by investing in both New Source and Calima 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 New Source and Calima Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between New Source Energy and Calima Energy Limited, you can compare the effects of market volatilities on New Source and Calima 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 New Source with a short position of Calima Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Source and Calima Energy.
Diversification Opportunities for New Source and Calima Energy
-1.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between New and Calima is -1.0. Overlapping area represents the amount of risk that can be diversified away by holding New Source Energy and Calima Energy Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calima Energy Limited and New Source 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 New Source Energy are associated (or correlated) with Calima Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calima Energy Limited has no effect on the direction of New Source i.e., New Source and Calima Energy go up and down completely randomly.
Pair Corralation between New Source and Calima Energy
If you would invest 10.00 in Calima Energy Limited on October 23, 2024 and sell it today you would lose (8.75) from holding Calima Energy Limited or give up 87.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Strong |
| Accuracy | 1.21% |
| Values | Daily Returns |
New Source Energy vs. Calima Energy Limited
Performance |
| Timeline |
| New Source Energy |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Calima Energy Limited |
New Source and Calima Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Source and Calima Energy
The main advantage of trading using opposite New Source and Calima Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Source position performs unexpectedly, Calima 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 Calima Energy will offset losses from the drop in Calima Energy's long position.| New Source vs. Calima Energy Limited | New Source vs. Barrister Energy LLC | New Source vs. Buru Energy Limited | New Source vs. Altura Energy |
| Calima Energy vs. Buru Energy Limited | Calima Energy vs. Altura Energy | Calima Energy vs. Daybreak Oil and | Calima Energy vs. Arrow Exploration 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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