Correlation Between Kiwetinohk Energy and CGX Energy

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

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

Diversification Opportunities for Kiwetinohk Energy and CGX Energy

-0.17

Correlation Coefficient

Kiwetinohk Energy  CGX Energy

Good diversification

The 3 months correlation between Kiwetinohk and CGX is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Kiwetinohk Energy Corp and CGX Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CGX Energy and Kiwetinohk 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 Kiwetinohk Energy Corp are associated (or correlated) with CGX Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CGX Energy has no effect on the direction of Kiwetinohk Energy i.e., Kiwetinohk Energy and CGX Energy go up and down completely randomly.

Pair Corralation between Kiwetinohk Energy and CGX Energy

Assuming the 90 days horizon Kiwetinohk Energy Corp is expected to generate 0.14 times more return on investment than CGX Energy. However, Kiwetinohk Energy Corp is 7.29 times less risky than CGX Energy. It trades about 0.22 of its potential returns per unit of risk. CGX Energy is currently generating about -0.17 per unit of risk. If you would invest  1,075  in Kiwetinohk Energy Corp on October 12, 2024 and sell it today you would earn a total of  42.00  from holding Kiwetinohk Energy Corp or generate 3.91% return on investment over 90 days.

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

Kiwetinohk Energy Corp  vs.  CGX Energy

Kiwetinohk Energy Corp

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Kiwetinohk Energy Corp are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, Kiwetinohk Energy is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

CGX Energy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CGX Energy has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Kiwetinohk Energy and CGX Energy

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

The idea behind Kiwetinohk Energy Corp and CGX 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.