Correlation Between Total Helium and CGX Energy
Can any of the company-specific risk be diversified away by investing in both Total Helium and CGX 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 Total Helium and CGX Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Total Helium and CGX Energy, you can compare the effects of market volatilities on Total Helium and CGX 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 Total Helium with a short position of CGX Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Total Helium and CGX Energy.
Diversification Opportunities for Total Helium and CGX Energy
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Total and CGX is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Total Helium and CGX Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CGX Energy and Total Helium 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 Total Helium are associated (or correlated) with CGX Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CGX Energy has no effect on the direction of Total Helium i.e., Total Helium and CGX Energy go up and down completely randomly.
Pair Corralation between Total Helium and CGX Energy
Assuming the 90 days horizon Total Helium is expected to generate 2.81 times more return on investment than CGX Energy. However, Total Helium is 2.81 times more volatile than CGX Energy. It trades about 0.22 of its potential returns per unit of risk. CGX Energy is currently generating about 0.17 per unit of risk. If you would invest 0.92 in Total Helium on October 23, 2024 and sell it today you would earn a total of 0.59 from holding Total Helium or generate 64.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Total Helium vs. CGX Energy
Performance |
| Timeline |
| Total Helium |
| CGX Energy |
Total Helium and CGX Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Total Helium and CGX Energy
The main advantage of trading using opposite Total Helium and CGX Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Total Helium position performs unexpectedly, CGX 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 CGX Energy will offset losses from the drop in CGX Energy's long position.| Total Helium vs. Royal Helium | Total Helium vs. Blue Star Helium | Total Helium vs. Avanti Energy | Total Helium vs. Arrow Exploration Corp |
| CGX Energy vs. Avanti Energy | CGX Energy vs. Desert Mountain Energy | CGX Energy vs. Royal Helium | CGX Energy vs. Eco Oil Gas |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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