Correlation Between Ranger Oil and Vermilion Energy

Can any of the company-specific risk be diversified away by investing in both Ranger Oil and Vermilion 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 Ranger Oil and Vermilion Energy 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 Vermilion Energy, you can compare the effects of market volatilities on Ranger Oil and Vermilion 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 Ranger Oil with a short position of Vermilion Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ranger Oil and Vermilion Energy.

Diversification Opportunities for Ranger Oil and Vermilion Energy

0.0

Correlation Coefficient

Ranger Oil  Vermilion Energy

Pay attention - limited upside

The 3 months correlation between Ranger and Vermilion is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Ranger Oil Corp and Vermilion Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vermilion Energy 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 Vermilion Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vermilion Energy has no effect on the direction of Ranger Oil i.e., Ranger Oil and Vermilion Energy go up and down completely randomly.

Pair Corralation between Ranger Oil and Vermilion Energy

If you would invest (100.00) in Ranger Oil Corp on December 20, 2024 and sell it today you would earn a total of  100.00  from holding Ranger Oil Corp or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Ranger Oil Corp  vs.  Vermilion Energy

Ranger Oil Corp

Risk-Adjusted Performance

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.

Vermilion Energy

Risk-Adjusted Performance

Very Weak

Over the last 90 days Vermilion Energy has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's technical and fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Ranger Oil and Vermilion Energy

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

The idea behind Ranger Oil Corp and Vermilion 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.

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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.