Correlation Between Topaz Energy and Mullen
Can any of the company-specific risk be diversified away by investing in both Topaz Energy and Mullen 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 Topaz Energy and Mullen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Topaz Energy Corp and Mullen Group, you can compare the effects of market volatilities on Topaz Energy and Mullen 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 Topaz Energy with a short position of Mullen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Topaz Energy and Mullen.
Diversification Opportunities for Topaz Energy and Mullen
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Topaz and Mullen is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Topaz Energy Corp and Mullen Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mullen Group and Topaz Energy 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 Topaz Energy Corp are associated (or correlated) with Mullen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mullen Group has no effect on the direction of Topaz Energy i.e., Topaz Energy and Mullen go up and down completely randomly.
Pair Corralation between Topaz Energy and Mullen
Assuming the 90 days trading horizon Topaz Energy Corp is expected to generate 1.24 times more return on investment than Mullen. However, Topaz Energy is 1.24 times more volatile than Mullen Group. It trades about 0.3 of its potential returns per unit of risk. Mullen Group is currently generating about 0.01 per unit of risk. If you would invest 2,721 in Topaz Energy Corp on August 25, 2024 and sell it today you would earn a total of 214.00 from holding Topaz Energy Corp or generate 7.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Topaz Energy Corp vs. Mullen Group
Performance |
| Timeline |
| Topaz Energy Corp |
| Mullen Group |
Topaz Energy and Mullen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Topaz Energy and Mullen
The main advantage of trading using opposite Topaz Energy and Mullen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Topaz Energy position performs unexpectedly, Mullen 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 Mullen will offset losses from the drop in Mullen's long position.| Topaz Energy vs. Headwater Exploration | Topaz Energy vs. Tamarack Valley Energy | Topaz Energy vs. Freehold Royalties | Topaz Energy vs. Tourmaline Oil Corp |
| Mullen vs. Pason Systems | Mullen vs. Westshore Terminals Investment | Mullen vs. Superior Plus Corp | Mullen vs. Gibson 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
Other Complementary Tools
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences |