Correlation Between Petro Viking and Kiwetinohk Energy

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

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

Diversification Opportunities for Petro Viking and Kiwetinohk Energy

-0.12

Correlation Coefficient

Petro Viking  Kiwetinohk Energy

Good diversification

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

Pair Corralation between Petro Viking and Kiwetinohk Energy

Assuming the 90 days horizon Petro Viking Energy is expected to generate 27.93 times more return on investment than Kiwetinohk Energy. However, Petro Viking is 27.93 times more volatile than Kiwetinohk Energy Corp. It trades about 0.14 of its potential returns per unit of risk. Kiwetinohk Energy Corp is currently generating about -0.05 per unit of risk. If you would invest  0.84  in Petro Viking Energy on December 22, 2024 and sell it today you would lose (0.48) from holding Petro Viking Energy or give up 57.14% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.77%
Values	Daily Returns

Petro Viking Energy  vs.  Kiwetinohk Energy Corp

Petro Viking Energy

Risk-Adjusted Performance

Good

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

Kiwetinohk Energy Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Kiwetinohk Energy Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's technical and fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Petro Viking and Kiwetinohk Energy

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

The idea behind Petro Viking Energy and Kiwetinohk 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.