Correlation Between Surge Energy and Petro Viking
Can any of the company-specific risk be diversified away by investing in both Surge Energy and Petro Viking 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 Surge Energy and Petro Viking into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Surge Energy and Petro Viking Energy, you can compare the effects of market volatilities on Surge Energy and Petro Viking 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 Surge Energy with a short position of Petro Viking. Check out your portfolio center. Please also check ongoing floating volatility patterns of Surge Energy and Petro Viking.
Diversification Opportunities for Surge Energy and Petro Viking
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Surge and Petro is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Surge Energy and Petro Viking Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Petro Viking Energy and Surge 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 Surge Energy are associated (or correlated) with Petro Viking. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Petro Viking Energy has no effect on the direction of Surge Energy i.e., Surge Energy and Petro Viking go up and down completely randomly.
Pair Corralation between Surge Energy and Petro Viking
Assuming the 90 days horizon Surge Energy is expected to under-perform the Petro Viking. But the pink sheet apears to be less risky and, when comparing its historical volatility, Surge Energy is 27.98 times less risky than Petro Viking. The pink sheet trades about -0.04 of its potential returns per unit of risk. The Petro Viking Energy is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 11.00 in Petro Viking Energy on January 13, 2025 and sell it today you would lose (10.41) from holding Petro Viking Energy or give up 94.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Surge Energy vs. Petro Viking Energy
Performance |
| Timeline |
| Surge Energy |
| Petro Viking Energy |
Surge Energy and Petro Viking Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Surge Energy and Petro Viking
The main advantage of trading using opposite Surge Energy and Petro Viking positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Surge Energy position performs unexpectedly, Petro Viking 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 Petro Viking will offset losses from the drop in Petro Viking's long position.| Surge Energy vs. Petro Viking Energy | Surge Energy vs. Parex Resources | Surge Energy vs. Razor Energy Corp | Surge Energy vs. Prospera Energy |
| Petro Viking vs. Africa Oil Corp | Petro Viking vs. Athabasca Oil Corp | Petro Viking vs. Journey Energy | Petro Viking vs. Aquagold International |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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