Correlation Between Peyto ExplorationDevel and Canacol Energy
Can any of the company-specific risk be diversified away by investing in both Peyto ExplorationDevel 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 Peyto ExplorationDevel and Canacol Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Peyto ExplorationDevelopment Corp and Canacol Energy, you can compare the effects of market volatilities on Peyto ExplorationDevel 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 Peyto ExplorationDevel with a short position of Canacol Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Peyto ExplorationDevel and Canacol Energy.
Diversification Opportunities for Peyto ExplorationDevel and Canacol Energy
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Peyto and Canacol is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Peyto ExplorationDevelopment C and Canacol Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canacol Energy and Peyto ExplorationDevel 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 Peyto ExplorationDevelopment Corp 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 Peyto ExplorationDevel i.e., Peyto ExplorationDevel and Canacol Energy go up and down completely randomly.
Pair Corralation between Peyto ExplorationDevel and Canacol Energy
Assuming the 90 days horizon Peyto ExplorationDevelopment Corp is expected to under-perform the Canacol Energy. But the pink sheet apears to be less risky and, when comparing its historical volatility, Peyto ExplorationDevelopment Corp is 2.75 times less risky than Canacol Energy. The pink sheet trades about -0.21 of its potential returns per unit of risk. The Canacol Energy is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 271.00 in Canacol Energy on November 2, 2024 and sell it today you would lose (10.00) from holding Canacol Energy or give up 3.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Peyto ExplorationDevelopment C vs. Canacol Energy
Performance |
| Timeline |
| Peyto ExplorationDevel |
| Canacol Energy |
Peyto ExplorationDevel and Canacol Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Peyto ExplorationDevel and Canacol Energy
The main advantage of trading using opposite Peyto ExplorationDevel and Canacol Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Peyto ExplorationDevel 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.| Peyto ExplorationDevel vs. Birchcliff Energy | Peyto ExplorationDevel vs. Tamarack Valley Energy | Peyto ExplorationDevel vs. Gear Energy | Peyto ExplorationDevel vs. Spartan Delta Corp |
| Canacol Energy vs. PetroShale | Canacol Energy vs. Inpex Corp ADR | Canacol Energy vs. Battalion Oil Corp | Canacol Energy vs. Condor Petroleum |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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