Correlation Between NuVista Energy and InPlay Oil
Can any of the company-specific risk be diversified away by investing in both NuVista Energy and InPlay 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 NuVista Energy and InPlay Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NuVista Energy and InPlay Oil Corp, you can compare the effects of market volatilities on NuVista Energy and InPlay 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 NuVista Energy with a short position of InPlay Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of NuVista Energy and InPlay Oil.
Diversification Opportunities for NuVista Energy and InPlay Oil
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NuVista and InPlay is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding NuVista Energy and InPlay Oil Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InPlay Oil Corp and NuVista 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 NuVista Energy are associated (or correlated) with InPlay Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of InPlay Oil Corp has no effect on the direction of NuVista Energy i.e., NuVista Energy and InPlay Oil go up and down completely randomly.
Pair Corralation between NuVista Energy and InPlay Oil
Assuming the 90 days horizon NuVista Energy is expected to under-perform the InPlay Oil. But the pink sheet apears to be less risky and, when comparing its historical volatility, NuVista Energy is 1.12 times less risky than InPlay Oil. The pink sheet trades about -0.32 of its potential returns per unit of risk. The InPlay Oil Corp is currently generating about -0.21 of returns per unit of risk over similar time horizon. If you would invest 119.00 in InPlay Oil Corp on December 6, 2024 and sell it today you would lose (14.00) from holding InPlay Oil Corp or give up 11.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NuVista Energy vs. InPlay Oil Corp
Performance |
| Timeline |
| NuVista Energy |
| InPlay Oil Corp |
NuVista Energy and InPlay Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NuVista Energy and InPlay Oil
The main advantage of trading using opposite NuVista Energy and InPlay Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NuVista Energy position performs unexpectedly, InPlay 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 InPlay Oil will offset losses from the drop in InPlay Oil's long position.| NuVista Energy vs. Kelt Exploration | NuVista Energy vs. Spartan Delta Corp | NuVista Energy vs. Headwater Exploration | NuVista Energy vs. International Petroleum |
| InPlay Oil vs. Petrus Resources | InPlay Oil vs. Hemisphere Energy | InPlay Oil vs. Headwater Exploration | InPlay Oil vs. Surge 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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