Correlation Between 1st NRG and Tourmaline Oil
Can any of the company-specific risk be diversified away by investing in both 1st NRG and Tourmaline 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 1st NRG and Tourmaline Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 1st NRG Corp and Tourmaline Oil Corp, you can compare the effects of market volatilities on 1st NRG and Tourmaline 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 1st NRG with a short position of Tourmaline Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of 1st NRG and Tourmaline Oil.
Diversification Opportunities for 1st NRG and Tourmaline Oil
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between 1st and Tourmaline is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding 1st NRG Corp and Tourmaline Oil Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tourmaline Oil Corp and 1st NRG 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 1st NRG Corp are associated (or correlated) with Tourmaline Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tourmaline Oil Corp has no effect on the direction of 1st NRG i.e., 1st NRG and Tourmaline Oil go up and down completely randomly.
Pair Corralation between 1st NRG and Tourmaline Oil
Given the investment horizon of 90 days 1st NRG Corp is expected to generate 19.37 times more return on investment than Tourmaline Oil. However, 1st NRG is 19.37 times more volatile than Tourmaline Oil Corp. It trades about 0.04 of its potential returns per unit of risk. Tourmaline Oil Corp is currently generating about 0.02 per unit of risk. If you would invest 0.01 in 1st NRG Corp on January 24, 2024 and sell it today you would earn a total of 0.00 from holding 1st NRG Corp or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
1st NRG Corp vs. Tourmaline Oil Corp
Performance |
| Timeline |
| 1st NRG Corp |
| Tourmaline Oil Corp |
1st NRG and Tourmaline Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 1st NRG and Tourmaline Oil
The main advantage of trading using opposite 1st NRG and Tourmaline Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 1st NRG position performs unexpectedly, Tourmaline 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 Tourmaline Oil will offset losses from the drop in Tourmaline Oil's long position.| 1st NRG vs. Pioneer Natural Resources | 1st NRG vs. Permian Resources | 1st NRG vs. Devon Energy | 1st NRG vs. EOG Resources |
| Tourmaline Oil vs. Indo Tambangraya Megah | Tourmaline Oil vs. Bukit Asam Tbk | Tourmaline Oil vs. Geo Energy Resources | Tourmaline Oil vs. Yancoal Australia |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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