Correlation Between Kiwetinohk Energy and Invictus Energy

Can any of the company-specific risk be diversified away by investing in both Kiwetinohk Energy and Invictus 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 Invictus 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 Invictus Energy Limited, you can compare the effects of market volatilities on Kiwetinohk Energy and Invictus 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 Invictus Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kiwetinohk Energy and Invictus Energy.

Diversification Opportunities for Kiwetinohk Energy and Invictus Energy

-0.47

Correlation Coefficient

Kiwetinohk Energy  Invictus Energy

Very good diversification

The 3 months correlation between Kiwetinohk and Invictus is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Kiwetinohk Energy Corp and Invictus Energy Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invictus 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 Invictus Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invictus Energy has no effect on the direction of Kiwetinohk Energy i.e., Kiwetinohk Energy and Invictus Energy go up and down completely randomly.

Pair Corralation between Kiwetinohk Energy and Invictus Energy

Assuming the 90 days horizon Kiwetinohk Energy is expected to generate 2.17 times less return on investment than Invictus Energy. But when comparing it to its historical volatility, Kiwetinohk Energy Corp is 7.25 times less risky than Invictus Energy. It trades about 0.08 of its potential returns per unit of risk. Invictus Energy Limited is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  4.35  in Invictus Energy Limited on September 13, 2024 and sell it today you would lose (0.15) from holding Invictus Energy Limited or give up 3.45% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Kiwetinohk Energy Corp  vs.  Invictus Energy Limited

Kiwetinohk Energy Corp

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Kiwetinohk Energy Corp are ranked lower than 6 (%) 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.

Invictus Energy

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Invictus Energy Limited are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Invictus Energy may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Kiwetinohk Energy and Invictus Energy

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

The idea behind Kiwetinohk Energy Corp and Invictus Energy Limited 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 Stocks Directory module to find actively traded stocks across global markets.