Correlation Between Surge Energy and Kelt Exploration
Can any of the company-specific risk be diversified away by investing in both Surge Energy and Kelt Exploration 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 Surge Energy and Kelt Exploration into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Surge Energy and Kelt Exploration, you can compare the effects of market volatilities on Surge Energy and Kelt Exploration 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 Surge Energy with a short position of Kelt Exploration. Check out your portfolio center. Please also check ongoing floating volatility patterns of Surge Energy and Kelt Exploration.
Diversification Opportunities for Surge Energy and Kelt Exploration
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Surge and Kelt is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Surge Energy and Kelt Exploration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kelt Exploration and Surge 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 Surge Energy are associated (or correlated) with Kelt Exploration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kelt Exploration has no effect on the direction of Surge Energy i.e., Surge Energy and Kelt Exploration go up and down completely randomly.
Pair Corralation between Surge Energy and Kelt Exploration
Assuming the 90 days trading horizon Surge Energy is expected to generate 1.16 times more return on investment than Kelt Exploration. However, Surge Energy is 1.16 times more volatile than Kelt Exploration. It trades about -0.1 of its potential returns per unit of risk. Kelt Exploration is currently generating about -0.29 per unit of risk. If you would invest 566.00 in Surge Energy on November 28, 2024 and sell it today you would lose (29.00) from holding Surge Energy or give up 5.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Surge Energy vs. Kelt Exploration
Performance |
| Timeline |
| Surge Energy |
| Kelt Exploration |
Surge Energy and Kelt Exploration Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Surge Energy and Kelt Exploration
The main advantage of trading using opposite Surge Energy and Kelt Exploration positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Surge Energy position performs unexpectedly, Kelt Exploration 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 Kelt Exploration will offset losses from the drop in Kelt Exploration's long position.| Surge Energy vs. Whitecap Resources | Surge Energy vs. Cardinal Energy | Surge Energy vs. Athabasca Oil Corp | Surge Energy vs. Tamarack Valley Energy |
| Kelt Exploration vs. NuVista Energy | Kelt Exploration vs. Advantage Oil Gas | Kelt Exploration vs. Birchcliff Energy | Kelt Exploration vs. Cardinal 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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