Correlation Between Tamarack Valley and Surge Energy
Can any of the company-specific risk be diversified away by investing in both Tamarack Valley and Surge 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 Tamarack Valley and Surge Energy 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 Surge Energy, you can compare the effects of market volatilities on Tamarack Valley and Surge 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 Tamarack Valley with a short position of Surge Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tamarack Valley and Surge Energy.
Diversification Opportunities for Tamarack Valley and Surge Energy
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Tamarack and Surge is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Tamarack Valley Energy and Surge Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Surge Energy 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 Surge Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Surge Energy has no effect on the direction of Tamarack Valley i.e., Tamarack Valley and Surge Energy go up and down completely randomly.
Pair Corralation between Tamarack Valley and Surge Energy
Assuming the 90 days horizon Tamarack Valley Energy is expected to generate 1.12 times more return on investment than Surge Energy. However, Tamarack Valley is 1.12 times more volatile than Surge Energy. It trades about 0.01 of its potential returns per unit of risk. Surge Energy is currently generating about -0.02 per unit of risk. If you would invest 338.00 in Tamarack Valley Energy on August 26, 2024 and sell it today you would lose (11.00) from holding Tamarack Valley Energy or give up 3.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tamarack Valley Energy vs. Surge Energy
Performance |
| Timeline |
| Tamarack Valley Energy |
| Surge Energy |
Tamarack Valley and Surge Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tamarack Valley and Surge Energy
The main advantage of trading using opposite Tamarack Valley and Surge Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tamarack Valley position performs unexpectedly, Surge 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 Surge Energy will offset losses from the drop in Surge Energy's 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 |
| Surge Energy vs. Petro Viking Energy | Surge Energy vs. Parex Resources | Surge Energy vs. Razor Energy Corp | Surge Energy vs. Prospera 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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