Correlation Between VOC Energy and Cheetah Oil

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

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

Diversification Opportunities for VOC Energy and Cheetah Oil

-0.31

Correlation Coefficient

VOC Energy  Cheetah Oil

Very good diversification

The 3 months correlation between VOC and Cheetah is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding VOC Energy Trust and Cheetah Oil Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cheetah Oil Gas and VOC 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 VOC Energy Trust are associated (or correlated) with Cheetah Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cheetah Oil Gas has no effect on the direction of VOC Energy i.e., VOC Energy and Cheetah Oil go up and down completely randomly.

Pair Corralation between VOC Energy and Cheetah Oil

Considering the 90-day investment horizon VOC Energy Trust is expected to under-perform the Cheetah Oil. But the stock apears to be less risky and, when comparing its historical volatility, VOC Energy Trust is 3.68 times less risky than Cheetah Oil. The stock trades about -0.16 of its potential returns per unit of risk. The Cheetah Oil Gas is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  0.01  in Cheetah Oil Gas on December 27, 2024 and sell it today you would earn a total of  0.01  from holding Cheetah Oil Gas or generate 100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.83%
Values	Daily Returns

VOC Energy Trust  vs.  Cheetah Oil Gas

VOC Energy Trust

Risk-Adjusted Performance

Very Weak

Over the last 90 days VOC Energy Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Cheetah Oil Gas

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Cheetah Oil Gas are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical indicators, Cheetah Oil reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with VOC Energy and Cheetah Oil

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

The idea behind VOC Energy Trust and Cheetah Oil Gas 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.