Correlation Between Gran Tierra and OLIVUT RESOURCES

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Can any of the company-specific risk be diversified away by investing in both Gran Tierra and OLIVUT RESOURCES 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 OLIVUT RESOURCES 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 OLIVUT RESOURCES, you can compare the effects of market volatilities on Gran Tierra and OLIVUT RESOURCES 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 OLIVUT RESOURCES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gran Tierra and OLIVUT RESOURCES.

Diversification Opportunities for Gran Tierra and OLIVUT RESOURCES

0.0
  Correlation Coefficient

Pay attention - limited upside

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

Pair Corralation between Gran Tierra and OLIVUT RESOURCES

If you would invest  39.00  in Gran Tierra Energy on September 5, 2022 and sell it today you would earn a total of  74.00  from holding Gran Tierra Energy or generate 189.74% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.2%
ValuesDaily Returns

Gran Tierra Energy  vs.  OLIVUT RESOURCES

 Performance (%) 
       Timeline  
Gran Tierra Energy 
Gran Tierra Performance
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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 weak 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

OLIVUT RESOURCES 
OLIVUT Performance
0 of 100
Over the last 90 days OLIVUT RESOURCES has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, OLIVUT RESOURCES is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Gran Tierra and OLIVUT RESOURCES Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Gran Tierra and OLIVUT RESOURCES

The main advantage of trading using opposite Gran Tierra and OLIVUT RESOURCES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gran Tierra position performs unexpectedly, OLIVUT RESOURCES 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 OLIVUT RESOURCES will offset losses from the drop in OLIVUT RESOURCES's long position.
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The idea behind Gran Tierra Energy and OLIVUT RESOURCES 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.
The effect of pair diversification on risk is to reduce it, but we should note this doesn't apply to all risk types. When we trade pairs against OLIVUT RESOURCES as a counterpart, there is always some inherent risk that will never be diversified away no matter what. This volatility limits the effect of tactical diversification using pair trading. OLIVUT RESOURCES's systematic risk is the inherent uncertainty of the entire market, and therefore cannot be mitigated even by pair-trading it against the equity that is not highly correlated to it. On the other hand, OLIVUT RESOURCES's unsystematic risk describes the types of risk that we can protect against, at least to some degree, by selecting a matching pair that is not perfectly correlated to OLIVUT RESOURCES.
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..

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