Correlation Between Gran Tierra and Rolls Royce

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Gran Tierra and Rolls Royce 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 Rolls Royce 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 Rolls Royce Grp, you can compare the effects of market volatilities on Gran Tierra and Rolls Royce 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 Rolls Royce. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gran Tierra and Rolls Royce.

Diversification Opportunities for Gran Tierra and Rolls Royce

-0.13
  Correlation Coefficient

Good diversification

The 3 months correlation between Gran Tierra and Rolls is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Gran Tierra Energy and Rolls Royce Grp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rolls Royce Grp 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 Rolls Royce. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rolls Royce Grp has no effect on the direction of Gran Tierra i.e., Gran Tierra and Rolls Royce go up and down completely randomly.

Pair Corralation between Gran Tierra and Rolls Royce

Considering the 90-day investment horizon Gran Tierra Energy is expected to under-perform the Rolls Royce. In addition to that, Gran Tierra is 1.37 times more volatile than Rolls Royce Grp. It trades about -0.18 of its total potential returns per unit of risk. Rolls Royce Grp is currently generating about 0.22 per unit of volatility. If you would invest  93.00  in Rolls Royce Grp on September 1, 2022 and sell it today you would earn a total of  12.00  from holding Rolls Royce Grp or generate 12.9% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy95.45%
ValuesDaily Returns

Gran Tierra Energy  vs.  Rolls Royce Grp

 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

Rolls Royce Grp 
Rolls Performance
8 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Rolls Royce Grp are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain technical and fundamental indicators, Rolls Royce showed solid returns over the last few months and may actually be approaching a breakup point.

Rolls Price Channel

Gran Tierra and Rolls Royce Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Gran Tierra and Rolls Royce

The main advantage of trading using opposite Gran Tierra and Rolls Royce positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gran Tierra position performs unexpectedly, Rolls Royce 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 Rolls Royce will offset losses from the drop in Rolls Royce's long position.
Gran Tierra vs. ConocoPhillips
Gran Tierra vs. Pioneer Natural Resources
Gran Tierra vs. Occidental Petroleum Corp
Gran Tierra vs. LINGERIE FIGHTING CHAMPIONSHIPS
The idea behind Gran Tierra Energy and Rolls Royce Grp 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.
Rolls Royce vs. Lockheed Martin Corp
Rolls Royce vs. Boeing Company
Rolls Royce vs. Northrop Grumman Corp
Rolls Royce vs. General Dynamics Corp
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 Watchlist Optimization module to optimize watchlists to build efficient portfolio or rebalance existing positions based on mean-variance optimization algorithm.

Other Complementary Tools

Idea Optimizer
Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio
Go
Insider Screener
Find insiders across different sectors to evaluate their impact on performance
Go
Premium Stories
Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope
Go
Portfolio Manager
State of the art Portfolio Manager to monitor and improve performance of your invested capital
Go
Alpha Finder
Use alpha and beta coefficients to find investment opportunities after accounting for the risk
Go
Equity Analysis
Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities
Go
Equity Analysis
Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities
Go
Insider Screener
Find insiders across different sectors to evaluate their impact on performance
Go
Equity Valuation
Check real value of public entities based on technical and fundamental data
Go
Stock Tickers
Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites
Go
Stock Tickers
Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites
Go