Correlation Between Vermilion Energy and Yangarra Resources
Can any of the company-specific risk be diversified away by investing in both Vermilion Energy and Yangarra Resources 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 Vermilion Energy and Yangarra Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vermilion Energy and Yangarra Resources, you can compare the effects of market volatilities on Vermilion Energy and Yangarra Resources 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 Vermilion Energy with a short position of Yangarra Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vermilion Energy and Yangarra Resources.
Diversification Opportunities for Vermilion Energy and Yangarra Resources
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Vermilion and Yangarra is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Vermilion Energy and Yangarra Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yangarra Resources and Vermilion 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 Vermilion Energy are associated (or correlated) with Yangarra Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yangarra Resources has no effect on the direction of Vermilion Energy i.e., Vermilion Energy and Yangarra Resources go up and down completely randomly.
Pair Corralation between Vermilion Energy and Yangarra Resources
Assuming the 90 days trading horizon Vermilion Energy is expected to generate 0.96 times more return on investment than Yangarra Resources. However, Vermilion Energy is 1.04 times less risky than Yangarra Resources. It trades about 0.0 of its potential returns per unit of risk. Yangarra Resources is currently generating about -0.05 per unit of risk. If you would invest 1,591 in Vermilion Energy on September 1, 2024 and sell it today you would lose (154.00) from holding Vermilion Energy or give up 9.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vermilion Energy vs. Yangarra Resources
Performance |
| Timeline |
| Vermilion Energy |
| Yangarra Resources |
Vermilion Energy and Yangarra Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vermilion Energy and Yangarra Resources
The main advantage of trading using opposite Vermilion Energy and Yangarra Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vermilion Energy position performs unexpectedly, Yangarra Resources 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 Yangarra Resources will offset losses from the drop in Yangarra Resources' long position.| Vermilion Energy vs. Whitecap Resources | Vermilion Energy vs. ARC Resources | Vermilion Energy vs. Tourmaline Oil Corp | Vermilion Energy vs. MEG Energy Corp |
| Yangarra Resources vs. InPlay Oil Corp | Yangarra Resources vs. Bonterra Energy Corp | Yangarra Resources vs. Gear Energy | Yangarra Resources vs. Kelt Exploration |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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