Correlation Between Secure Energy and Advantage Oil
Can any of the company-specific risk be diversified away by investing in both Secure Energy and Advantage 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 Secure Energy and Advantage Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Secure Energy Services and Advantage Oil Gas, you can compare the effects of market volatilities on Secure Energy and Advantage 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 Secure Energy with a short position of Advantage Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Secure Energy and Advantage Oil.
Diversification Opportunities for Secure Energy and Advantage Oil
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Secure and Advantage is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Secure Energy Services and Advantage Oil Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advantage Oil Gas and Secure Energy 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 Secure Energy Services are associated (or correlated) with Advantage Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advantage Oil Gas has no effect on the direction of Secure Energy i.e., Secure Energy and Advantage Oil go up and down completely randomly.
Pair Corralation between Secure Energy and Advantage Oil
Assuming the 90 days trading horizon Secure Energy Services is expected to generate 0.88 times more return on investment than Advantage Oil. However, Secure Energy Services is 1.13 times less risky than Advantage Oil. It trades about 0.16 of its potential returns per unit of risk. Advantage Oil Gas is currently generating about 0.03 per unit of risk. If you would invest 574.00 in Secure Energy Services on September 1, 2024 and sell it today you would earn a total of 1,011 from holding Secure Energy Services or generate 176.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Secure Energy Services vs. Advantage Oil Gas
Performance |
| Timeline |
| Secure Energy Services |
| Advantage Oil Gas |
Secure Energy and Advantage Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Secure Energy and Advantage Oil
The main advantage of trading using opposite Secure Energy and Advantage Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Secure Energy position performs unexpectedly, Advantage 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 Advantage Oil will offset losses from the drop in Advantage Oil's long position.| Secure Energy vs. CES Energy Solutions | Secure Energy vs. Ensign Energy Services | Secure Energy vs. Enerflex | Secure Energy vs. Pason Systems |
| Advantage Oil vs. Birchcliff Energy | Advantage Oil vs. NuVista Energy | Advantage Oil vs. Kelt Exploration | Advantage Oil vs. Peyto ExplorationDevelopment Corp |
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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