Correlation Between US Energy and Arrow Exploration
Can any of the company-specific risk be diversified away by investing in both US Energy and Arrow Exploration 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 Arrow Exploration 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 Arrow Exploration Corp, you can compare the effects of market volatilities on US Energy and Arrow Exploration 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 Arrow Exploration. Check out your portfolio center. Please also check ongoing floating volatility patterns of US Energy and Arrow Exploration.
Diversification Opportunities for US Energy and Arrow Exploration
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between USEG and Arrow is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding US Energy Corp and Arrow Exploration Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arrow Exploration Corp 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 Arrow Exploration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arrow Exploration Corp has no effect on the direction of US Energy i.e., US Energy and Arrow Exploration go up and down completely randomly.
Pair Corralation between US Energy and Arrow Exploration
Given the investment horizon of 90 days US Energy Corp is expected to generate 1.09 times more return on investment than Arrow Exploration. However, US Energy is 1.09 times more volatile than Arrow Exploration Corp. It trades about 0.22 of its potential returns per unit of risk. Arrow Exploration Corp is currently generating about 0.01 per unit of risk. If you would invest 98.00 in US Energy Corp on October 24, 2024 and sell it today you would earn a total of 281.00 from holding US Energy Corp or generate 286.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
US Energy Corp vs. Arrow Exploration Corp
Performance |
| Timeline |
| US Energy Corp |
| Arrow Exploration Corp |
US Energy and Arrow Exploration Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with US Energy and Arrow Exploration
The main advantage of trading using opposite US Energy and Arrow Exploration positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if US Energy position performs unexpectedly, Arrow Exploration 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 Arrow Exploration will offset losses from the drop in Arrow Exploration'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 |
| Arrow Exploration vs. Barrister Energy LLC | Arrow Exploration vs. Buru Energy Limited | Arrow Exploration vs. Altura Energy | Arrow Exploration vs. Daybreak Oil and |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments |