Correlation Between Obsidian Energy and MEG Energy
Can any of the company-specific risk be diversified away by investing in both Obsidian Energy and MEG 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 Obsidian Energy and MEG Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Obsidian Energy and MEG Energy Corp, you can compare the effects of market volatilities on Obsidian Energy and MEG 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 Obsidian Energy with a short position of MEG Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Obsidian Energy and MEG Energy.
Diversification Opportunities for Obsidian Energy and MEG Energy
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Obsidian and MEG is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Obsidian Energy and MEG Energy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MEG Energy 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 MEG Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MEG Energy Corp has no effect on the direction of Obsidian Energy i.e., Obsidian Energy and MEG Energy go up and down completely randomly.
Pair Corralation between Obsidian Energy and MEG Energy
Assuming the 90 days trading horizon Obsidian Energy is expected to under-perform the MEG Energy. In addition to that, Obsidian Energy is 1.23 times more volatile than MEG Energy Corp. It trades about -0.04 of its total potential returns per unit of risk. MEG Energy Corp is currently generating about -0.01 per unit of volatility. If you would invest 2,668 in MEG Energy Corp on September 14, 2024 and sell it today you would lose (295.00) from holding MEG Energy Corp or give up 11.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.63% |
| Values | Daily Returns |
Obsidian Energy vs. MEG Energy Corp
Performance |
| Timeline |
| Obsidian Energy |
| MEG Energy Corp |
Obsidian Energy and MEG Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Obsidian Energy and MEG Energy
The main advantage of trading using opposite Obsidian Energy and MEG Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Obsidian Energy position performs unexpectedly, MEG 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 MEG Energy will offset losses from the drop in MEG Energy's long position.| Obsidian Energy vs. Bonterra Energy Corp | Obsidian Energy vs. Cardinal Energy | Obsidian Energy vs. Surge Energy | Obsidian Energy vs. InPlay Oil Corp |
| MEG Energy vs. Gear Energy | MEG Energy vs. Journey Energy | MEG Energy vs. Yangarra Resources | MEG Energy vs. Obsidian 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| Transaction History View history of all your transactions and understand their impact on performance | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world |