Correlation Between Touchstone Exploration and PetroShale
Can any of the company-specific risk be diversified away by investing in both Touchstone Exploration and PetroShale 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 Touchstone Exploration and PetroShale into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Touchstone Exploration and PetroShale, you can compare the effects of market volatilities on Touchstone Exploration and PetroShale 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 Touchstone Exploration with a short position of PetroShale. Check out your portfolio center. Please also check ongoing floating volatility patterns of Touchstone Exploration and PetroShale.
Diversification Opportunities for Touchstone Exploration and PetroShale
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Touchstone and PetroShale is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Touchstone Exploration and PetroShale in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PetroShale and Touchstone Exploration 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 Touchstone Exploration are associated (or correlated) with PetroShale. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PetroShale has no effect on the direction of Touchstone Exploration i.e., Touchstone Exploration and PetroShale go up and down completely randomly.
Pair Corralation between Touchstone Exploration and PetroShale
Assuming the 90 days horizon Touchstone Exploration is expected to under-perform the PetroShale. In addition to that, Touchstone Exploration is 1.12 times more volatile than PetroShale. It trades about -0.03 of its total potential returns per unit of risk. PetroShale is currently generating about 0.01 per unit of volatility. If you would invest 31.00 in PetroShale on November 28, 2024 and sell it today you would earn a total of 0.00 from holding PetroShale or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Touchstone Exploration vs. PetroShale
Performance |
| Timeline |
| Touchstone Exploration |
| PetroShale |
Touchstone Exploration and PetroShale Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Touchstone Exploration and PetroShale
The main advantage of trading using opposite Touchstone Exploration and PetroShale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Touchstone Exploration position performs unexpectedly, PetroShale 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 PetroShale will offset losses from the drop in PetroShale's long position.| Touchstone Exploration vs. Altura Energy | Touchstone Exploration vs. AXP Energy | Touchstone Exploration vs. Canacol Energy | Touchstone Exploration vs. Parex Resources |
| PetroShale vs. Dno ASA | PetroShale vs. Horizon Oil Limited | PetroShale vs. Enwell Energy plc | PetroShale vs. Tullow Oil plc |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins |