Correlation Between True North and Strat Petroleum
Can any of the company-specific risk be diversified away by investing in both True North and Strat Petroleum 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 True North and Strat Petroleum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between True North Energy and Strat Petroleum, you can compare the effects of market volatilities on True North and Strat Petroleum 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 True North with a short position of Strat Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of True North and Strat Petroleum.
Diversification Opportunities for True North and Strat Petroleum
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between True and Strat is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding True North Energy and Strat Petroleum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strat Petroleum and True North 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 True North Energy are associated (or correlated) with Strat Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strat Petroleum has no effect on the direction of True North i.e., True North and Strat Petroleum go up and down completely randomly.
Pair Corralation between True North and Strat Petroleum
If you would invest 0.00 in Strat Petroleum on September 12, 2024 and sell it today you would earn a total of 0.00 from holding Strat Petroleum or generate 9.223372036854776E16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
True North Energy vs. Strat Petroleum
Performance |
| Timeline |
| True North Energy |
| Strat Petroleum |
True North and Strat Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with True North and Strat Petroleum
The main advantage of trading using opposite True North and Strat Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if True North position performs unexpectedly, Strat Petroleum 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 Strat Petroleum will offset losses from the drop in Strat Petroleum's long position.| True North vs. Strat Petroleum | True North vs. Imperial Res | True North vs. Century Petroleum Corp | True North vs. Barrel Energy |
| Strat Petroleum vs. Evolution Petroleum | Strat Petroleum vs. Ring Energy | Strat Petroleum vs. Gran Tierra Energy | Strat Petroleum vs. Permian 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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