Correlation Between Obsidian Energy and Petro Victory
Can any of the company-specific risk be diversified away by investing in both Obsidian Energy and Petro Victory 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 Petro Victory into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Obsidian Energy and Petro Victory Energy Corp, you can compare the effects of market volatilities on Obsidian Energy and Petro Victory 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 Petro Victory. Check out your portfolio center. Please also check ongoing floating volatility patterns of Obsidian Energy and Petro Victory.
Diversification Opportunities for Obsidian Energy and Petro Victory
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Obsidian and Petro is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Obsidian Energy and Petro Victory Energy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Petro Victory Energy 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 Petro Victory. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Petro Victory Energy has no effect on the direction of Obsidian Energy i.e., Obsidian Energy and Petro Victory go up and down completely randomly.
Pair Corralation between Obsidian Energy and Petro Victory
Assuming the 90 days trading horizon Obsidian Energy is expected to generate 0.22 times more return on investment than Petro Victory. However, Obsidian Energy is 4.57 times less risky than Petro Victory. It trades about 0.28 of its potential returns per unit of risk. Petro Victory Energy Corp is currently generating about -0.24 per unit of risk. If you would invest 736.00 in Obsidian Energy on October 22, 2024 and sell it today you would earn a total of 84.00 from holding Obsidian Energy or generate 11.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 94.44% |
| Values | Daily Returns |
Obsidian Energy vs. Petro Victory Energy Corp
Performance |
| Timeline |
| Obsidian Energy |
| Petro Victory Energy |
Obsidian Energy and Petro Victory Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Obsidian Energy and Petro Victory
The main advantage of trading using opposite Obsidian Energy and Petro Victory positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Obsidian Energy position performs unexpectedly, Petro Victory 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 Petro Victory will offset losses from the drop in Petro Victory'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 |
| Petro Victory vs. Thunderbird Entertainment Group | Petro Victory vs. High Liner Foods | Petro Victory vs. Pembina Pipeline Corp | Petro Victory vs. Canlan Ice Sports |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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