Correlation Between Valeura Energy and Calfrac Well
Can any of the company-specific risk be diversified away by investing in both Valeura Energy and Calfrac Well 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 Valeura Energy and Calfrac Well into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Valeura Energy and Calfrac Well Services, you can compare the effects of market volatilities on Valeura Energy and Calfrac Well 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 Valeura Energy with a short position of Calfrac Well. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valeura Energy and Calfrac Well.
Diversification Opportunities for Valeura Energy and Calfrac Well
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Valeura and Calfrac is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Valeura Energy and Calfrac Well Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calfrac Well Services and Valeura 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 Valeura Energy are associated (or correlated) with Calfrac Well. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calfrac Well Services has no effect on the direction of Valeura Energy i.e., Valeura Energy and Calfrac Well go up and down completely randomly.
Pair Corralation between Valeura Energy and Calfrac Well
Assuming the 90 days horizon Valeura Energy is expected to generate 1.63 times more return on investment than Calfrac Well. However, Valeura Energy is 1.63 times more volatile than Calfrac Well Services. It trades about 0.24 of its potential returns per unit of risk. Calfrac Well Services is currently generating about -0.16 per unit of risk. If you would invest 378.00 in Valeura Energy on September 26, 2024 and sell it today you would earn a total of 68.00 from holding Valeura Energy or generate 17.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Valeura Energy vs. Calfrac Well Services
Performance |
| Timeline |
| Valeura Energy |
| Calfrac Well Services |
Valeura Energy and Calfrac Well Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Valeura Energy and Calfrac Well
The main advantage of trading using opposite Valeura Energy and Calfrac Well positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valeura Energy position performs unexpectedly, Calfrac Well 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 Calfrac Well will offset losses from the drop in Calfrac Well's long position.| Valeura Energy vs. Legacy Education | Valeura Energy vs. Apple Inc | Valeura Energy vs. NVIDIA | Valeura Energy vs. Microsoft |
| Calfrac Well vs. Greenway Technologies | Calfrac Well vs. Akastor ASA | Calfrac Well vs. Auri Inc | Calfrac Well vs. Us Energy Initiative |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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