Correlation Between Obsidian Energy and Ovintiv
Can any of the company-specific risk be diversified away by investing in both Obsidian Energy and Ovintiv 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 Ovintiv into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Obsidian Energy and Ovintiv, you can compare the effects of market volatilities on Obsidian Energy and Ovintiv 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 Ovintiv. Check out your portfolio center. Please also check ongoing floating volatility patterns of Obsidian Energy and Ovintiv.
Diversification Opportunities for Obsidian Energy and Ovintiv
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Obsidian and Ovintiv is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Obsidian Energy and Ovintiv in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ovintiv 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 Ovintiv. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ovintiv has no effect on the direction of Obsidian Energy i.e., Obsidian Energy and Ovintiv go up and down completely randomly.
Pair Corralation between Obsidian Energy and Ovintiv
Considering the 90-day investment horizon Obsidian Energy is expected to under-perform the Ovintiv. In addition to that, Obsidian Energy is 1.07 times more volatile than Ovintiv. It trades about -0.09 of its total potential returns per unit of risk. Ovintiv is currently generating about -0.06 per unit of volatility. If you would invest 4,574 in Ovintiv on November 18, 2024 and sell it today you would lose (161.00) from holding Ovintiv or give up 3.52% 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. Ovintiv
Performance |
| Timeline |
| Obsidian Energy |
| Ovintiv |
Obsidian Energy and Ovintiv Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Obsidian Energy and Ovintiv
The main advantage of trading using opposite Obsidian Energy and Ovintiv positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Obsidian Energy position performs unexpectedly, Ovintiv 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 Ovintiv will offset losses from the drop in Ovintiv's long position.| Obsidian Energy vs. Baytex Energy Corp | Obsidian Energy vs. Vermilion Energy | Obsidian Energy vs. Canadian Natural Resources | Obsidian Energy vs. Ovintiv |
| Ovintiv vs. Baytex Energy Corp | Ovintiv vs. Obsidian Energy | Ovintiv vs. Canadian Natural Resources | Ovintiv vs. Vermilion 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
Other Complementary Tools
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities |