Correlation Between US Energy and Coastal Caribbean
Can any of the company-specific risk be diversified away by investing in both US Energy and Coastal Caribbean 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 US Energy and Coastal Caribbean into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between US Energy Corp and Coastal Caribbean Oils, you can compare the effects of market volatilities on US Energy and Coastal Caribbean 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 US Energy with a short position of Coastal Caribbean. Check out your portfolio center. Please also check ongoing floating volatility patterns of US Energy and Coastal Caribbean.
Diversification Opportunities for US Energy and Coastal Caribbean
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between USEG and Coastal is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding US Energy Corp and Coastal Caribbean Oils in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coastal Caribbean Oils and US 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 US Energy Corp are associated (or correlated) with Coastal Caribbean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coastal Caribbean Oils has no effect on the direction of US Energy i.e., US Energy and Coastal Caribbean go up and down completely randomly.
Pair Corralation between US Energy and Coastal Caribbean
If you would invest 165.00 in US Energy Corp on November 4, 2024 and sell it today you would earn a total of 54.00 from holding US Energy Corp or generate 32.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 5.0% |
| Values | Daily Returns |
US Energy Corp vs. Coastal Caribbean Oils
Performance |
| Timeline |
| US Energy Corp |
| Coastal Caribbean Oils |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
US Energy and Coastal Caribbean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with US Energy and Coastal Caribbean
The main advantage of trading using opposite US Energy and Coastal Caribbean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if US Energy position performs unexpectedly, Coastal Caribbean 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 Coastal Caribbean will offset losses from the drop in Coastal Caribbean's long position.| US Energy vs. PEDEVCO Corp | US Energy vs. Houston American Energy | US Energy vs. PHX Minerals | US Energy vs. Trio Petroleum Corp |
| Coastal Caribbean vs. Strat Petroleum | Coastal Caribbean vs. Imperial Res | Coastal Caribbean vs. Century Petroleum Corp |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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