Correlation Between NYSE Composite and Tourmaline Oil
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and Tourmaline Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Tourmaline Oil Corp, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of Tourmaline Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Tourmaline Oil.
Diversification Opportunities for NYSE Composite and Tourmaline Oil
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NYSE and Tourmaline is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite 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 NYSE Composite 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 NYSE Composite 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 NYSE Composite i.e., NYSE Composite and Tourmaline Oil go up and down completely randomly.
Pair Corralation between NYSE Composite and Tourmaline Oil
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.4 times more return on investment than Tourmaline Oil. However, NYSE Composite is 2.49 times less risky than Tourmaline Oil. It trades about 0.14 of its potential returns per unit of risk. Tourmaline Oil Corp is currently generating about 0.01 per unit of risk. If you would invest 1,800,696 in NYSE Composite on September 1, 2024 and sell it today you would earn a total of 226,508 from holding NYSE Composite or generate 12.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.21% |
| Values | Daily Returns |
NYSE Composite vs. Tourmaline Oil Corp
Performance |
| Timeline |
NYSE Composite and Tourmaline Oil Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Tourmaline Oil Corp
Pair trading matchups for Tourmaline Oil
Pair Trading with NYSE Composite and Tourmaline Oil
The main advantage of trading using opposite NYSE Composite and Tourmaline Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Acumen Pharmaceuticals | NYSE Composite vs. Mind Medicine | NYSE Composite vs. NL Industries | NYSE Composite vs. Ecovyst |
| Tourmaline Oil vs. Petroleo Brasileiro Petrobras | Tourmaline Oil vs. Equinor ASA ADR | Tourmaline Oil vs. Eni SpA ADR | Tourmaline Oil vs. YPF Sociedad Anonima |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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