Correlation Between Pancontinental Oil and Invictus Energy
Can any of the company-specific risk be diversified away by investing in both Pancontinental Oil and Invictus 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 Pancontinental Oil and Invictus Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pancontinental Oil Gas and Invictus Energy Limited, you can compare the effects of market volatilities on Pancontinental Oil and Invictus 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 Pancontinental Oil with a short position of Invictus Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pancontinental Oil and Invictus Energy.
Diversification Opportunities for Pancontinental Oil and Invictus Energy
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Pancontinental and Invictus is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Pancontinental Oil Gas and Invictus Energy Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invictus Energy and Pancontinental Oil 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 Pancontinental Oil Gas are associated (or correlated) with Invictus Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invictus Energy has no effect on the direction of Pancontinental Oil i.e., Pancontinental Oil and Invictus Energy go up and down completely randomly.
Pair Corralation between Pancontinental Oil and Invictus Energy
Assuming the 90 days horizon Pancontinental Oil Gas is expected to generate 1.84 times more return on investment than Invictus Energy. However, Pancontinental Oil is 1.84 times more volatile than Invictus Energy Limited. It trades about 0.07 of its potential returns per unit of risk. Invictus Energy Limited is currently generating about 0.02 per unit of risk. If you would invest 0.90 in Pancontinental Oil Gas on October 23, 2024 and sell it today you would earn a total of 0.30 from holding Pancontinental Oil Gas or generate 33.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pancontinental Oil Gas vs. Invictus Energy Limited
Performance |
| Timeline |
| Pancontinental Oil Gas |
| Invictus Energy |
Pancontinental Oil and Invictus Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pancontinental Oil and Invictus Energy
The main advantage of trading using opposite Pancontinental Oil and Invictus Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pancontinental Oil position performs unexpectedly, Invictus 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 Invictus Energy will offset losses from the drop in Invictus Energy's long position.| Pancontinental Oil vs. Kiwetinohk Energy Corp | Pancontinental Oil vs. Melbana Energy Limited | Pancontinental Oil vs. Eco Oil Gas | Pancontinental Oil vs. Kelt Exploration |
| Invictus Energy vs. Sintana Energy | Invictus Energy vs. 88 Energy Limited | Invictus Energy vs. Journey Energy | Invictus Energy vs. Trillion Energy International |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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