Correlation Between TAG Oil and Hemisphere Energy
Can any of the company-specific risk be diversified away by investing in both TAG Oil and Hemisphere 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 TAG Oil and Hemisphere Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TAG Oil and Hemisphere Energy, you can compare the effects of market volatilities on TAG Oil and Hemisphere 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 TAG Oil with a short position of Hemisphere Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of TAG Oil and Hemisphere Energy.
Diversification Opportunities for TAG Oil and Hemisphere Energy
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between TAG and Hemisphere is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding TAG Oil and Hemisphere Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hemisphere Energy and TAG Oil 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 TAG Oil are associated (or correlated) with Hemisphere Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hemisphere Energy has no effect on the direction of TAG Oil i.e., TAG Oil and Hemisphere Energy go up and down completely randomly.
Pair Corralation between TAG Oil and Hemisphere Energy
Assuming the 90 days horizon TAG Oil is expected to under-perform the Hemisphere Energy. In addition to that, TAG Oil is 2.51 times more volatile than Hemisphere Energy. It trades about -0.1 of its total potential returns per unit of risk. Hemisphere Energy is currently generating about 0.06 per unit of volatility. If you would invest 158.00 in Hemisphere Energy on September 3, 2024 and sell it today you would earn a total of 30.00 from holding Hemisphere Energy or generate 18.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TAG Oil vs. Hemisphere Energy
Performance |
| Timeline |
| TAG Oil |
| Hemisphere Energy |
TAG Oil and Hemisphere Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TAG Oil and Hemisphere Energy
The main advantage of trading using opposite TAG Oil and Hemisphere Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TAG Oil position performs unexpectedly, Hemisphere 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 Hemisphere Energy will offset losses from the drop in Hemisphere Energy's long position.| TAG Oil vs. Southern Energy Corp | TAG Oil vs. ShaMaran Petroleum Corp | TAG Oil vs. Tenaz Energy Corp | TAG Oil vs. Hemisphere Energy |
| Hemisphere Energy vs. InPlay Oil Corp | Hemisphere Energy vs. Pine Cliff Energy | Hemisphere Energy vs. Journey Energy | Hemisphere Energy vs. Yangarra Resources |
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 CEOs Directory module to screen CEOs from public companies around the world.
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