Correlation Between WesCan Energy and TAG Oil
Can any of the company-specific risk be diversified away by investing in both WesCan Energy and TAG Oil 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 WesCan Energy and TAG Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WesCan Energy Corp and TAG Oil, you can compare the effects of market volatilities on WesCan Energy and TAG Oil 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 WesCan Energy with a short position of TAG Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of WesCan Energy and TAG Oil.
Diversification Opportunities for WesCan Energy and TAG Oil
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between WesCan and TAG is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding WesCan Energy Corp and TAG Oil in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TAG Oil and WesCan 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 WesCan Energy Corp are associated (or correlated) with TAG Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TAG Oil has no effect on the direction of WesCan Energy i.e., WesCan Energy and TAG Oil go up and down completely randomly.
Pair Corralation between WesCan Energy and TAG Oil
If you would invest 7.00 in WesCan Energy Corp on December 1, 2024 and sell it today you would earn a total of 0.00 from holding WesCan Energy Corp or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
WesCan Energy Corp vs. TAG Oil
Performance |
| Timeline |
| WesCan Energy Corp |
| TAG Oil |
WesCan Energy and TAG Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WesCan Energy and TAG Oil
The main advantage of trading using opposite WesCan Energy and TAG Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WesCan Energy position performs unexpectedly, TAG Oil 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 TAG Oil will offset losses from the drop in TAG Oil's long position.| WesCan Energy vs. Prospera Energy | WesCan Energy vs. Prairie Provident Resources | WesCan Energy vs. Vital Energy |
| TAG Oil vs. Southern Energy Corp | TAG Oil vs. ShaMaran Petroleum Corp | TAG Oil vs. Tenaz Energy Corp | TAG Oil vs. Hemisphere Energy |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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