Correlation Between Pine Cliff and Valeura Energy
Can any of the company-specific risk be diversified away by investing in both Pine Cliff and Valeura 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 Valeura 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 Valeura Energy, you can compare the effects of market volatilities on Pine Cliff and Valeura 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 Valeura Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pine Cliff and Valeura Energy.
Diversification Opportunities for Pine Cliff and Valeura Energy
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Pine and Valeura is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Pine Cliff Energy and Valeura Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Valeura 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 Valeura Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Valeura Energy has no effect on the direction of Pine Cliff i.e., Pine Cliff and Valeura Energy go up and down completely randomly.
Pair Corralation between Pine Cliff and Valeura Energy
Assuming the 90 days trading horizon Pine Cliff Energy is expected to under-perform the Valeura Energy. But the stock apears to be less risky and, when comparing its historical volatility, Pine Cliff Energy is 1.46 times less risky than Valeura Energy. The stock trades about -0.03 of its potential returns per unit of risk. The Valeura Energy is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 568.00 in Valeura Energy on September 3, 2024 and sell it today you would earn a total of 54.00 from holding Valeura Energy or generate 9.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pine Cliff Energy vs. Valeura Energy
Performance |
| Timeline |
| Pine Cliff Energy |
| Valeura Energy |
Pine Cliff and Valeura Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pine Cliff and Valeura Energy
The main advantage of trading using opposite Pine Cliff and Valeura Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pine Cliff position performs unexpectedly, Valeura 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 Valeura Energy will offset losses from the drop in Valeura Energy's long position.| Pine Cliff vs. Gear Energy | Pine Cliff vs. Headwater Exploration | Pine Cliff vs. Cardinal Energy | Pine Cliff vs. Journey 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
Other Complementary Tools
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device |