Correlation Between Gran Tierra and Celo

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

Diversification Opportunities for Gran Tierra and Celo

0.34
  Correlation Coefficient

Weak diversification

The 3 months correlation between Gran Tierra and Celo is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Gran Tierra Energy and Celo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Celo and Gran Tierra 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 Gran Tierra Energy are associated (or correlated) with Celo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Celo has no effect on the direction of Gran Tierra i.e., Gran Tierra and Celo go up and down completely randomly.

Pair Corralation between Gran Tierra and Celo

Considering the 90-day investment horizon Gran Tierra Energy is expected to generate 0.75 times more return on investment than Celo. However, Gran Tierra Energy is 1.33 times less risky than Celo. It trades about 0.07 of its potential returns per unit of risk. Celo is currently generating about -0.1 per unit of risk. If you would invest  70.00  in Gran Tierra Energy on August 29, 2022 and sell it today you would earn a total of  46.00  from holding Gran Tierra Energy or generate 65.71% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy96.51%
ValuesDaily Returns

Gran Tierra Energy  vs.  Celo

 Performance (%) 
       Timeline  
Gran Tierra Energy 
Gran Tierra Performance
0 of 100
Over the last 90 days Gran Tierra Energy has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Gran Tierra Price Channel

Celo 
Celo Performance
0 of 100
Over the last 90 days Celo has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Crypto's essential indicators remain somewhat strong which may send shares a bit higher in December 2022. The current disturbance may also be a sign of long term up-swing for Celo investors.

Celo Price Channel

Gran Tierra and Celo Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Gran Tierra and Celo

The main advantage of trading using opposite Gran Tierra and Celo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gran Tierra position performs unexpectedly, Celo 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 Celo will offset losses from the drop in Celo's long position.
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The idea behind Gran Tierra Energy and Celo 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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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.

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