Correlation Between Pine Cliff and EnQuest PLC
Can any of the company-specific risk be diversified away by investing in both Pine Cliff and EnQuest PLC 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 EnQuest PLC 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 EnQuest PLC, you can compare the effects of market volatilities on Pine Cliff and EnQuest PLC 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 EnQuest PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pine Cliff and EnQuest PLC.
Diversification Opportunities for Pine Cliff and EnQuest PLC
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Pine and EnQuest is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Pine Cliff Energy and EnQuest PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EnQuest PLC 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 EnQuest PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EnQuest PLC has no effect on the direction of Pine Cliff i.e., Pine Cliff and EnQuest PLC go up and down completely randomly.
Pair Corralation between Pine Cliff and EnQuest PLC
Assuming the 90 days horizon Pine Cliff Energy is expected to under-perform the EnQuest PLC. But the pink sheet apears to be less risky and, when comparing its historical volatility, Pine Cliff Energy is 1.17 times less risky than EnQuest PLC. The pink sheet trades about -0.02 of its potential returns per unit of risk. The EnQuest PLC is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 14.00 in EnQuest PLC on August 30, 2024 and sell it today you would earn a total of 0.00 from holding EnQuest PLC or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Pine Cliff Energy vs. EnQuest PLC
Performance |
| Timeline |
| Pine Cliff Energy |
| EnQuest PLC |
Pine Cliff and EnQuest PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pine Cliff and EnQuest PLC
The main advantage of trading using opposite Pine Cliff and EnQuest PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pine Cliff position performs unexpectedly, EnQuest PLC 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 EnQuest PLC will offset losses from the drop in EnQuest PLC'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 |
| EnQuest PLC vs. Permian Resources | EnQuest PLC vs. Devon Energy | EnQuest PLC vs. EOG Resources | EnQuest PLC vs. Coterra Energy |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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