Correlation Between Ovintiv and Gran Tierra
Can any of the company-specific risk be diversified away by investing in both Ovintiv and Gran Tierra 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 Ovintiv and Gran Tierra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ovintiv and Gran Tierra Energy, you can compare the effects of market volatilities on Ovintiv and Gran Tierra 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 Ovintiv with a short position of Gran Tierra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ovintiv and Gran Tierra.
Diversification Opportunities for Ovintiv and Gran Tierra
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Ovintiv and Gran is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Ovintiv and Gran Tierra Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gran Tierra Energy and Ovintiv 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 Ovintiv are associated (or correlated) with Gran Tierra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gran Tierra Energy has no effect on the direction of Ovintiv i.e., Ovintiv and Gran Tierra go up and down completely randomly.
Pair Corralation between Ovintiv and Gran Tierra
Considering the 90-day investment horizon Ovintiv is expected to generate 0.85 times more return on investment than Gran Tierra. However, Ovintiv is 1.18 times less risky than Gran Tierra. It trades about 0.34 of its potential returns per unit of risk. Gran Tierra Energy is currently generating about -0.05 per unit of risk. If you would invest 3,914 in Ovintiv on August 28, 2024 and sell it today you would earn a total of 661.00 from holding Ovintiv or generate 16.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ovintiv vs. Gran Tierra Energy
Performance |
| Timeline |
| Ovintiv |
| Gran Tierra Energy |
Ovintiv and Gran Tierra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ovintiv and Gran Tierra
The main advantage of trading using opposite Ovintiv and Gran Tierra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ovintiv position performs unexpectedly, Gran Tierra 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 Gran Tierra will offset losses from the drop in Gran Tierra's long position.| Ovintiv vs. Baytex Energy Corp | Ovintiv vs. Obsidian Energy | Ovintiv vs. Canadian Natural Resources | Ovintiv vs. Vermilion Energy |
| Gran Tierra vs. Permian Resources | Gran Tierra vs. PEDEVCO Corp | Gran Tierra vs. Vermilion Energy | Gran Tierra vs. Ovintiv |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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