Correlation Between Vermilion Energy and Crescent Point
Can any of the company-specific risk be diversified away by investing in both Vermilion Energy and Crescent Point 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 Crescent Point into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vermilion Energy and Crescent Point Energy, you can compare the effects of market volatilities on Vermilion Energy and Crescent Point 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 Crescent Point. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vermilion Energy and Crescent Point.
Diversification Opportunities for Vermilion Energy and Crescent Point
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Vermilion and Crescent is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Vermilion Energy and Crescent Point Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crescent Point Energy 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 Crescent Point. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crescent Point Energy has no effect on the direction of Vermilion Energy i.e., Vermilion Energy and Crescent Point go up and down completely randomly.
Pair Corralation between Vermilion Energy and Crescent Point
If you would invest 1,012 in Vermilion Energy on August 23, 2024 and sell it today you would earn a total of 72.00 from holding Vermilion Energy or generate 7.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 1.56% |
| Values | Daily Returns |
Vermilion Energy vs. Crescent Point Energy
Performance |
| Timeline |
| Vermilion Energy |
| Crescent Point Energy |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Vermilion Energy and Crescent Point Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vermilion Energy and Crescent Point
The main advantage of trading using opposite Vermilion Energy and Crescent Point positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vermilion Energy position performs unexpectedly, Crescent Point 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 Crescent Point will offset losses from the drop in Crescent Point's long position.| Vermilion Energy vs. Baytex Energy Corp | Vermilion Energy vs. Obsidian Energy | Vermilion Energy vs. Canadian Natural Resources | Vermilion Energy vs. Ovintiv |
| Crescent Point vs. Vermilion Energy | Crescent Point vs. Canadian Natural Resources | Crescent Point vs. Baytex Energy Corp | Crescent Point vs. Ovintiv |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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