Correlation Between Surge Energy and Obsidian Energy
Can any of the company-specific risk be diversified away by investing in both Surge Energy and Obsidian 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 Surge Energy and Obsidian Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Surge Energy and Obsidian Energy, you can compare the effects of market volatilities on Surge Energy and Obsidian 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 Surge Energy with a short position of Obsidian Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Surge Energy and Obsidian Energy.
Diversification Opportunities for Surge Energy and Obsidian Energy
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Surge and Obsidian is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Surge Energy and Obsidian Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Obsidian Energy 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 Obsidian Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Obsidian Energy has no effect on the direction of Surge Energy i.e., Surge Energy and Obsidian Energy go up and down completely randomly.
Pair Corralation between Surge Energy and Obsidian Energy
Assuming the 90 days trading horizon Surge Energy is expected to generate 0.97 times more return on investment than Obsidian Energy. However, Surge Energy is 1.03 times less risky than Obsidian Energy. It trades about -0.25 of its potential returns per unit of risk. Obsidian Energy is currently generating about -0.37 per unit of risk. If you would invest 595.00 in Surge Energy on November 3, 2024 and sell it today you would lose (53.00) from holding Surge Energy or give up 8.91% 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. Obsidian Energy
Performance |
| Timeline |
| Surge Energy |
| Obsidian Energy |
Surge Energy and Obsidian Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Surge Energy and Obsidian Energy
The main advantage of trading using opposite Surge Energy and Obsidian Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Surge Energy position performs unexpectedly, Obsidian 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 Obsidian Energy will offset losses from the drop in Obsidian Energy'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 |
| Obsidian Energy vs. Bonterra Energy Corp | Obsidian Energy vs. Cardinal Energy | Obsidian Energy vs. Surge Energy | Obsidian Energy vs. InPlay Oil 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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