Correlation Between WesCan Energy and Yangarra Resources
Can any of the company-specific risk be diversified away by investing in both WesCan 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 WesCan 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 WesCan Energy Corp and Yangarra Resources, you can compare the effects of market volatilities on WesCan 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 WesCan Energy with a short position of Yangarra Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of WesCan Energy and Yangarra Resources.
Diversification Opportunities for WesCan Energy and Yangarra Resources
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between WesCan and Yangarra is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding WesCan Energy Corp and Yangarra Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yangarra Resources 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 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 WesCan Energy i.e., WesCan Energy and Yangarra Resources go up and down completely randomly.
Pair Corralation between WesCan Energy and Yangarra Resources
Assuming the 90 days horizon WesCan Energy Corp is expected to generate 4.49 times more return on investment than Yangarra Resources. However, WesCan Energy is 4.49 times more volatile than Yangarra Resources. It trades about 0.04 of its potential returns per unit of risk. Yangarra Resources is currently generating about -0.07 per unit of risk. If you would invest 14.00 in WesCan Energy Corp on September 3, 2024 and sell it today you would lose (5.00) from holding WesCan Energy Corp or give up 35.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
WesCan Energy Corp vs. Yangarra Resources
Performance |
| Timeline |
| WesCan Energy Corp |
| Yangarra Resources |
WesCan Energy and Yangarra Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WesCan Energy and Yangarra Resources
The main advantage of trading using opposite WesCan Energy and Yangarra Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WesCan 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.The idea behind WesCan Energy Corp and Yangarra Resources pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
Other Complementary Tools
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |