Correlation Between Trican Well and Kelt Exploration
Can any of the company-specific risk be diversified away by investing in both Trican Well 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 Trican Well and Kelt Exploration into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Trican Well Service and Kelt Exploration, you can compare the effects of market volatilities on Trican Well 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 Trican Well with a short position of Kelt Exploration. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trican Well and Kelt Exploration.
Diversification Opportunities for Trican Well and Kelt Exploration
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Trican and Kelt is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Trican Well Service and Kelt Exploration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kelt Exploration and Trican Well 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 Trican Well Service 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 Trican Well i.e., Trican Well and Kelt Exploration go up and down completely randomly.
Pair Corralation between Trican Well and Kelt Exploration
Assuming the 90 days trading horizon Trican Well Service is expected to generate 0.88 times more return on investment than Kelt Exploration. However, Trican Well Service is 1.13 times less risky than Kelt Exploration. It trades about 0.15 of its potential returns per unit of risk. Kelt Exploration is currently generating about 0.08 per unit of risk. If you would invest 462.00 in Trican Well Service on September 1, 2024 and sell it today you would earn a total of 27.00 from holding Trican Well Service or generate 5.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Trican Well Service vs. Kelt Exploration
Performance |
| Timeline |
| Trican Well Service |
| Kelt Exploration |
Trican Well and Kelt Exploration Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Trican Well and Kelt Exploration
The main advantage of trading using opposite Trican Well and Kelt Exploration positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trican Well 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.| Trican Well vs. Calfrac Well Services | Trican Well vs. Precision Drilling | Trican Well vs. Ensign Energy Services | Trican Well vs. Birchcliff Energy |
| Kelt Exploration vs. Journey Energy | Kelt Exploration vs. Yangarra Resources | Kelt Exploration vs. Obsidian Energy | Kelt Exploration vs. Pine Cliff 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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