Correlation Between NuVista Energy and Birchcliff Energy
Can any of the company-specific risk be diversified away by investing in both NuVista Energy and Birchcliff 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 NuVista Energy and Birchcliff Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NuVista Energy and Birchcliff Energy, you can compare the effects of market volatilities on NuVista Energy and Birchcliff 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 NuVista Energy with a short position of Birchcliff Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of NuVista Energy and Birchcliff Energy.
Diversification Opportunities for NuVista Energy and Birchcliff Energy
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between NuVista and Birchcliff is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding NuVista Energy and Birchcliff Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Birchcliff Energy 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 Birchcliff Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Birchcliff Energy has no effect on the direction of NuVista Energy i.e., NuVista Energy and Birchcliff Energy go up and down completely randomly.
Pair Corralation between NuVista Energy and Birchcliff Energy
Assuming the 90 days trading horizon NuVista Energy is expected to generate 0.87 times more return on investment than Birchcliff Energy. However, NuVista Energy is 1.16 times less risky than Birchcliff Energy. It trades about 0.01 of its potential returns per unit of risk. Birchcliff Energy is currently generating about -0.01 per unit of risk. If you would invest 1,200 in NuVista Energy on November 19, 2024 and sell it today you would earn a total of 38.00 from holding NuVista Energy or generate 3.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NuVista Energy vs. Birchcliff Energy
Performance |
| Timeline |
| NuVista Energy |
| Birchcliff Energy |
NuVista Energy and Birchcliff Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NuVista Energy and Birchcliff Energy
The main advantage of trading using opposite NuVista Energy and Birchcliff Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NuVista Energy position performs unexpectedly, Birchcliff 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 Birchcliff Energy will offset losses from the drop in Birchcliff Energy's long position.| NuVista Energy vs. Tamarack Valley Energy | NuVista Energy vs. Birchcliff Energy | NuVista Energy vs. MEG Energy Corp |
| Birchcliff Energy vs. Tourmaline Oil Corp | Birchcliff Energy vs. ARC Resources | Birchcliff Energy vs. NuVista Energy | Birchcliff Energy vs. Whitecap Resources |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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