Correlation Between Obsidian Energy and InPlay Oil
Can any of the company-specific risk be diversified away by investing in both Obsidian 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 Obsidian 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 Obsidian Energy and InPlay Oil Corp, you can compare the effects of market volatilities on Obsidian 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 Obsidian Energy with a short position of InPlay Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Obsidian Energy and InPlay Oil.
Diversification Opportunities for Obsidian Energy and InPlay Oil
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Obsidian and InPlay is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Obsidian 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 Obsidian 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 Obsidian 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 Obsidian Energy i.e., Obsidian Energy and InPlay Oil go up and down completely randomly.
Pair Corralation between Obsidian Energy and InPlay Oil
Assuming the 90 days trading horizon Obsidian Energy is expected to generate 1.36 times more return on investment than InPlay Oil. However, Obsidian Energy is 1.36 times more volatile than InPlay Oil Corp. It trades about 0.01 of its potential returns per unit of risk. InPlay Oil Corp is currently generating about -0.14 per unit of risk. If you would invest 790.00 in Obsidian Energy on August 29, 2024 and sell it today you would lose (2.00) from holding Obsidian Energy or give up 0.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Obsidian Energy vs. InPlay Oil Corp
Performance |
| Timeline |
| Obsidian Energy |
| InPlay Oil Corp |
Obsidian Energy and InPlay Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Obsidian Energy and InPlay Oil
The main advantage of trading using opposite Obsidian Energy and InPlay Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Obsidian 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.| Obsidian Energy vs. Canadian Natural Resources | Obsidian Energy vs. Suncor Energy | Obsidian Energy vs. iShares Canadian HYBrid | Obsidian Energy vs. Altagas Cum Red |
| InPlay Oil vs. Canadian Natural Resources | InPlay Oil vs. Suncor Energy | InPlay Oil vs. iShares Canadian HYBrid | InPlay Oil vs. Altagas Cum Red |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
Other Complementary Tools
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |