Correlation Between SCOR PK and Tourmaline Oil
Can any of the company-specific risk be diversified away by investing in both SCOR PK and Tourmaline Oil 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 SCOR PK and Tourmaline Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SCOR PK and Tourmaline Oil Corp, you can compare the effects of market volatilities on SCOR PK and Tourmaline Oil 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 SCOR PK with a short position of Tourmaline Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCOR PK and Tourmaline Oil.
Diversification Opportunities for SCOR PK and Tourmaline Oil
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SCOR and Tourmaline is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding SCOR PK and Tourmaline Oil Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tourmaline Oil Corp and SCOR PK 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 SCOR PK are associated (or correlated) with Tourmaline Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tourmaline Oil Corp has no effect on the direction of SCOR PK i.e., SCOR PK and Tourmaline Oil go up and down completely randomly.
Pair Corralation between SCOR PK and Tourmaline Oil
Assuming the 90 days horizon SCOR PK is expected to generate 1.48 times more return on investment than Tourmaline Oil. However, SCOR PK is 1.48 times more volatile than Tourmaline Oil Corp. It trades about 0.27 of its potential returns per unit of risk. Tourmaline Oil Corp is currently generating about 0.07 per unit of risk. If you would invest 214.00 in SCOR PK on September 4, 2024 and sell it today you would earn a total of 34.00 from holding SCOR PK or generate 15.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
SCOR PK vs. Tourmaline Oil Corp
Performance |
| Timeline |
| SCOR PK |
| Tourmaline Oil Corp |
SCOR PK and Tourmaline Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SCOR PK and Tourmaline Oil
The main advantage of trading using opposite SCOR PK and Tourmaline Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCOR PK position performs unexpectedly, Tourmaline Oil 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 Tourmaline Oil will offset losses from the drop in Tourmaline Oil's long position.The idea behind SCOR PK and Tourmaline Oil Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Tourmaline Oil vs. Seadrill Limited | Tourmaline Oil vs. Noble plc | Tourmaline Oil vs. Borr Drilling | Tourmaline Oil vs. SCOR PK |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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