Correlation Between Ovintiv and Vermilion Energy
Can any of the company-specific risk be diversified away by investing in both Ovintiv and Vermilion 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 Ovintiv and Vermilion Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ovintiv and Vermilion Energy, you can compare the effects of market volatilities on Ovintiv and Vermilion 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 Ovintiv with a short position of Vermilion Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ovintiv and Vermilion Energy.
Diversification Opportunities for Ovintiv and Vermilion Energy
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ovintiv and Vermilion is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Ovintiv and Vermilion Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vermilion 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 Vermilion Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vermilion Energy has no effect on the direction of Ovintiv i.e., Ovintiv and Vermilion Energy go up and down completely randomly.
Pair Corralation between Ovintiv and Vermilion Energy
Considering the 90-day investment horizon Ovintiv is expected to generate 0.92 times more return on investment than Vermilion Energy. However, Ovintiv is 1.09 times less risky than Vermilion Energy. It trades about 0.28 of its potential returns per unit of risk. Vermilion Energy is currently generating about 0.2 per unit of risk. If you would invest 4,042 in Ovintiv on August 23, 2024 and sell it today you would earn a total of 617.00 from holding Ovintiv or generate 15.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ovintiv vs. Vermilion Energy
Performance |
| Timeline |
| Ovintiv |
| Vermilion Energy |
Ovintiv and Vermilion Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ovintiv and Vermilion Energy
The main advantage of trading using opposite Ovintiv and Vermilion Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ovintiv position performs unexpectedly, Vermilion 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 Vermilion Energy will offset losses from the drop in Vermilion Energy's long position.| Ovintiv vs. Baytex Energy Corp | Ovintiv vs. Obsidian Energy | Ovintiv vs. Canadian Natural Resources | Ovintiv vs. Vermilion Energy |
| Vermilion Energy vs. Baytex Energy Corp | Vermilion Energy vs. Obsidian Energy | Vermilion Energy vs. Canadian Natural Resources | Vermilion Energy 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| 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 | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments |