Correlation Between Cardinal Energy and Crown Point

Can any of the company-specific risk be diversified away by investing in both Cardinal Energy and Crown Point 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 Cardinal Energy and Crown Point into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Cardinal Energy and Crown Point

0.12

Correlation Coefficient

Cardinal Energy  Crown Point

Average diversification

The 3 months correlation between Cardinal and Crown is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Cardinal Energy and Crown Point Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crown Point Energy and Cardinal 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 Cardinal Energy are associated (or correlated) with Crown Point. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crown Point Energy has no effect on the direction of Cardinal Energy i.e., Cardinal Energy and Crown Point go up and down completely randomly.

Pair Corralation between Cardinal Energy and Crown Point

If you would invest  451.00  in Cardinal Energy on December 29, 2024 and sell it today you would earn a total of  1.00  from holding Cardinal Energy or generate 0.22% return on investment over 90 days.

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

Cardinal Energy  vs.  Crown Point Energy

Cardinal Energy

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cardinal Energy has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Cardinal Energy is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Crown Point Energy

Risk-Adjusted Performance

Very Weak

Over the last 90 days Crown Point Energy has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable essential indicators, Crown Point is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Cardinal Energy and Crown Point

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

The idea behind Cardinal Energy and Crown Point Energy 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.