Correlation Between Pine Cliff and Cardinal Energy
Can any of the company-specific risk be diversified away by investing in both Pine Cliff and Cardinal 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 Cardinal 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 Cardinal Energy, you can compare the effects of market volatilities on Pine Cliff and Cardinal 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 Cardinal Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pine Cliff and Cardinal Energy.
Diversification Opportunities for Pine Cliff and Cardinal Energy
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Pine and Cardinal is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Pine Cliff Energy and Cardinal Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cardinal 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 Cardinal Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cardinal Energy has no effect on the direction of Pine Cliff i.e., Pine Cliff and Cardinal Energy go up and down completely randomly.
Pair Corralation between Pine Cliff and Cardinal Energy
Assuming the 90 days horizon Pine Cliff Energy is expected to under-perform the Cardinal Energy. In addition to that, Pine Cliff is 1.24 times more volatile than Cardinal Energy. It trades about -0.25 of its total potential returns per unit of risk. Cardinal Energy is currently generating about -0.24 per unit of volatility. If you would invest 462.00 in Cardinal Energy on November 3, 2024 and sell it today you would lose (27.00) from holding Cardinal Energy or give up 5.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Pine Cliff Energy vs. Cardinal Energy
Performance |
| Timeline |
| Pine Cliff Energy |
| Cardinal Energy |
Pine Cliff and Cardinal Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pine Cliff and Cardinal Energy
The main advantage of trading using opposite Pine Cliff and Cardinal Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pine Cliff position performs unexpectedly, Cardinal 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 Cardinal Energy will offset losses from the drop in Cardinal 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 |
| Cardinal Energy vs. Tamarack Valley Energy | Cardinal Energy vs. Pine Cliff Energy | Cardinal Energy vs. MEG Energy Corp | Cardinal Energy vs. Headwater Exploration |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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