Correlation Between Condor Energies and Homerun Resources

Can any of the company-specific risk be diversified away by investing in both Condor Energies and Homerun 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 Condor Energies and Homerun Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Condor Energies and Homerun Resources, you can compare the effects of market volatilities on Condor Energies and Homerun 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 Condor Energies with a short position of Homerun Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Condor Energies and Homerun Resources.

Diversification Opportunities for Condor Energies and Homerun Resources

0.51

Correlation Coefficient

Condor Energies  Homerun Resources

Very weak diversification

The 3 months correlation between Condor and Homerun is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Condor Energies and Homerun Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Homerun Resources and Condor Energies 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 Condor Energies are associated (or correlated) with Homerun Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Homerun Resources has no effect on the direction of Condor Energies i.e., Condor Energies and Homerun Resources go up and down completely randomly.

Pair Corralation between Condor Energies and Homerun Resources

Assuming the 90 days trading horizon Condor Energies is expected to generate 0.47 times more return on investment than Homerun Resources. However, Condor Energies is 2.11 times less risky than Homerun Resources. It trades about -0.03 of its potential returns per unit of risk. Homerun Resources is currently generating about -0.09 per unit of risk. If you would invest  184.00  in Condor Energies on October 25, 2024 and sell it today you would lose (2.00) from holding Condor Energies or give up 1.09% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Condor Energies  vs.  Homerun Resources

Condor Energies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Condor Energies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Homerun Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Homerun Resources has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with Condor Energies and Homerun Resources

The main advantage of trading using opposite Condor Energies and Homerun Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Condor Energies position performs unexpectedly, Homerun 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 Homerun Resources will offset losses from the drop in Homerun Resources' long position.

The idea behind Condor Energies and Homerun 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.

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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.