Correlation Between Tamarack Valley and Whitecap Resources
Can any of the company-specific risk be diversified away by investing in both Tamarack Valley and Whitecap Resources 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 Tamarack Valley and Whitecap Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tamarack Valley Energy and Whitecap Resources, you can compare the effects of market volatilities on Tamarack Valley and Whitecap Resources 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 Tamarack Valley with a short position of Whitecap Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tamarack Valley and Whitecap Resources.
Diversification Opportunities for Tamarack Valley and Whitecap Resources
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Tamarack and Whitecap is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Tamarack Valley Energy and Whitecap Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Whitecap Resources and Tamarack Valley 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 Tamarack Valley Energy are associated (or correlated) with Whitecap Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Whitecap Resources has no effect on the direction of Tamarack Valley i.e., Tamarack Valley and Whitecap Resources go up and down completely randomly.
Pair Corralation between Tamarack Valley and Whitecap Resources
Assuming the 90 days horizon Tamarack Valley Energy is expected to generate 1.61 times more return on investment than Whitecap Resources. However, Tamarack Valley is 1.61 times more volatile than Whitecap Resources. It trades about 0.3 of its potential returns per unit of risk. Whitecap Resources is currently generating about 0.05 per unit of risk. If you would invest 282.00 in Tamarack Valley Energy on August 25, 2024 and sell it today you would earn a total of 45.00 from holding Tamarack Valley Energy or generate 15.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Tamarack Valley Energy vs. Whitecap Resources
Performance |
| Timeline |
| Tamarack Valley Energy |
| Whitecap Resources |
Tamarack Valley and Whitecap Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tamarack Valley and Whitecap Resources
The main advantage of trading using opposite Tamarack Valley and Whitecap Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tamarack Valley position performs unexpectedly, Whitecap Resources 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 Whitecap Resources will offset losses from the drop in Whitecap Resources' long position.| Tamarack Valley vs. Petroleo Brasileiro Petrobras | Tamarack Valley vs. Equinor ASA ADR | Tamarack Valley vs. Eni SpA ADR | Tamarack Valley vs. YPF Sociedad Anonima |
| Whitecap Resources vs. Petroleo Brasileiro Petrobras | Whitecap Resources vs. Equinor ASA ADR | Whitecap Resources vs. Eni SpA ADR | Whitecap Resources vs. YPF Sociedad Anonima |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Global Correlations Find global opportunities by holding instruments from different markets |