Correlation Between Ranger Oil and Ovintiv

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Can any of the company-specific risk be diversified away by investing in both Ranger Oil and Ovintiv 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 Ranger Oil and Ovintiv into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ranger Oil Corp and Ovintiv, you can compare the effects of market volatilities on Ranger Oil and Ovintiv 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 Ranger Oil with a short position of Ovintiv. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ranger Oil and Ovintiv.

Diversification Opportunities for Ranger Oil and Ovintiv

-0.39
  Correlation Coefficient

Very good diversification

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

Pair Corralation between Ranger Oil and Ovintiv

If you would invest  4,194  in Ovintiv on October 12, 2024 and sell it today you would earn a total of  49.00  from holding Ovintiv or generate 1.17% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy5.0%
ValuesDaily Returns

Ranger Oil Corp  vs.  Ovintiv

 Performance 
       Timeline  
Ranger Oil Corp 

Risk-Adjusted Performance

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Weak
 
Strong
Very Weak
Over the last 90 days Ranger Oil Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, Ranger Oil is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.
Ovintiv 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Very Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Ovintiv are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Ovintiv is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Ranger Oil and Ovintiv Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Ranger Oil and Ovintiv

The main advantage of trading using opposite Ranger Oil and Ovintiv positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ranger Oil position performs unexpectedly, Ovintiv 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 Ovintiv will offset losses from the drop in Ovintiv's long position.
The idea behind Ranger Oil Corp and Ovintiv 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.
Check out your portfolio center.
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.

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