Correlation Between Orca Energy and Canacol Energy
Can any of the company-specific risk be diversified away by investing in both Orca Energy and Canacol 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 Orca Energy and Canacol Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Orca Energy Group and Canacol Energy, you can compare the effects of market volatilities on Orca Energy and Canacol 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 Orca Energy with a short position of Canacol Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orca Energy and Canacol Energy.
Diversification Opportunities for Orca Energy and Canacol Energy
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Orca and Canacol is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Orca Energy Group and Canacol Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canacol Energy and Orca 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 Orca Energy Group are associated (or correlated) with Canacol Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canacol Energy has no effect on the direction of Orca Energy i.e., Orca Energy and Canacol Energy go up and down completely randomly.
Pair Corralation between Orca Energy and Canacol Energy
Assuming the 90 days trading horizon Orca Energy is expected to generate 2.13 times less return on investment than Canacol Energy. But when comparing it to its historical volatility, Orca Energy Group is 1.28 times less risky than Canacol Energy. It trades about 0.07 of its potential returns per unit of risk. Canacol Energy is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 354.00 in Canacol Energy on September 5, 2024 and sell it today you would earn a total of 57.00 from holding Canacol Energy or generate 16.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Orca Energy Group vs. Canacol Energy
Performance |
| Timeline |
| Orca Energy Group |
| Canacol Energy |
Orca Energy and Canacol Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orca Energy and Canacol Energy
The main advantage of trading using opposite Orca Energy and Canacol Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orca Energy position performs unexpectedly, Canacol 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 Canacol Energy will offset losses from the drop in Canacol Energy's long position.| Orca Energy vs. Alvopetro Energy | Orca Energy vs. Hemisphere Energy | Orca Energy vs. Canacol Energy | Orca Energy vs. Source Rock Royalties |
| Canacol Energy vs. Parex Resources | Canacol Energy vs. Gran Tierra Energy | Canacol Energy vs. Kelt Exploration | Canacol Energy vs. Advantage Oil Gas |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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