Correlation Between Obsidian Energy and Amplify Energy

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

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

Diversification Opportunities for Obsidian Energy and Amplify Energy

0.3

Correlation Coefficient

Obsidian Energy  Amplify Energy

Weak diversification

The 3 months correlation between Obsidian and Amplify is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Obsidian Energy and Amplify Energy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amplify Energy Corp and Obsidian 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 Obsidian Energy are associated (or correlated) with Amplify Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amplify Energy Corp has no effect on the direction of Obsidian Energy i.e., Obsidian Energy and Amplify Energy go up and down completely randomly.

Pair Corralation between Obsidian Energy and Amplify Energy

Considering the 90-day investment horizon Obsidian Energy is expected to generate 1.11 times more return on investment than Amplify Energy. However, Obsidian Energy is 1.11 times more volatile than Amplify Energy Corp. It trades about 0.07 of its potential returns per unit of risk. Amplify Energy Corp is currently generating about -0.18 per unit of risk. If you would invest  535.00  in Obsidian Energy on December 26, 2024 and sell it today you would earn a total of  68.00  from holding Obsidian Energy or generate 12.71% return on investment over 90 days.

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

Obsidian Energy  vs.  Amplify Energy Corp

Obsidian Energy

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Obsidian Energy are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental drivers, Obsidian Energy exhibited solid returns over the last few months and may actually be approaching a breakup point.

Amplify Energy Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Amplify Energy Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Obsidian Energy and Amplify Energy

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

The idea behind Obsidian Energy and Amplify Energy Corp 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..