Correlation Between Peyto ExplorationDevel and Crew Energy

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

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

Diversification Opportunities for Peyto ExplorationDevel and Crew Energy

0.39

Correlation Coefficient

Peyto ExplorationDevel  Crew Energy

Weak diversification

The 3 months correlation between Peyto and Crew is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Peyto ExplorationDevelopment C and Crew Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crew Energy and Peyto ExplorationDevel 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 Peyto ExplorationDevelopment Corp are associated (or correlated) with Crew Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crew Energy has no effect on the direction of Peyto ExplorationDevel i.e., Peyto ExplorationDevel and Crew Energy go up and down completely randomly.

Pair Corralation between Peyto ExplorationDevel and Crew Energy

Assuming the 90 days horizon Peyto ExplorationDevel is expected to generate 1.94 times less return on investment than Crew Energy. In addition to that, Peyto ExplorationDevel is 1.09 times more volatile than Crew Energy. It trades about 0.15 of its total potential returns per unit of risk. Crew Energy is currently generating about 0.31 per unit of volatility. If you would invest  500.00  in Crew Energy on September 4, 2024 and sell it today you would earn a total of  51.00  from holding Crew Energy or generate 10.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	35.94%
Values	Daily Returns

Peyto ExplorationDevelopment C  vs.  Crew Energy

Peyto ExplorationDevel

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Peyto ExplorationDevelopment Corp are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Peyto ExplorationDevel reported solid returns over the last few months and may actually be approaching a breakup point.

Crew Energy

Risk-Adjusted Performance

0 of 100

Solid

Over the last 90 days Crew Energy has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly fragile technical and fundamental indicators, Crew Energy reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Peyto ExplorationDevel and Crew Energy

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

The idea behind Peyto ExplorationDevelopment Corp and Crew 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.