Correlation Between Pine Cliff and Bengal Energy
Can any of the company-specific risk be diversified away by investing in both Pine Cliff and Bengal 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 Pine Cliff and Bengal Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pine Cliff Energy and Bengal Energy, you can compare the effects of market volatilities on Pine Cliff and Bengal 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 Pine Cliff with a short position of Bengal Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pine Cliff and Bengal Energy.
Diversification Opportunities for Pine Cliff and Bengal Energy
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Pine and Bengal is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Pine Cliff Energy and Bengal Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bengal Energy and Pine Cliff 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 Pine Cliff Energy are associated (or correlated) with Bengal Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bengal Energy has no effect on the direction of Pine Cliff i.e., Pine Cliff and Bengal Energy go up and down completely randomly.
Pair Corralation between Pine Cliff and Bengal Energy
Assuming the 90 days horizon Pine Cliff Energy is expected to under-perform the Bengal Energy. But the pink sheet apears to be less risky and, when comparing its historical volatility, Pine Cliff Energy is 6.61 times less risky than Bengal Energy. The pink sheet trades about -0.26 of its potential returns per unit of risk. The Bengal Energy is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 0.80 in Bengal Energy on November 3, 2024 and sell it today you would lose (0.11) from holding Bengal Energy or give up 13.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Pine Cliff Energy vs. Bengal Energy
Performance |
| Timeline |
| Pine Cliff Energy |
| Bengal Energy |
Pine Cliff and Bengal Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pine Cliff and Bengal Energy
The main advantage of trading using opposite Pine Cliff and Bengal Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pine Cliff position performs unexpectedly, Bengal 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 Bengal Energy will offset losses from the drop in Bengal Energy's long position.| Pine Cliff vs. Athabasca Oil Corp | Pine Cliff vs. Cardinal Energy | Pine Cliff vs. Tamarack Valley Energy | Pine Cliff vs. Saturn Oil Gas |
| Bengal Energy vs. Agnico Eagle Mines | Bengal Energy vs. Osisko Gold Ro | Bengal Energy vs. Gold Fields Ltd | Bengal Energy vs. AngloGold Ashanti 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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