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
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Surge and Petro is -0.2. 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 37.93 times less risky than Petro Viking. The pink sheet trades about -0.07 of its potential returns per unit of risk. The Petro Viking Energy is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 1.19 in Petro Viking Energy on November 3, 2024 and sell it today you would lose (0.94) from holding Petro Viking Energy or give up 78.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| 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. Otto Energy Limited | Petro Viking vs. Foothills Exploration | Petro Viking vs. MMEX Resources Corp | Petro Viking vs. 1st NRG Corp |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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