Correlation Between TOURMALINE OIL and American Fds

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Can any of the company-specific risk be diversified away by investing in both TOURMALINE OIL and American Fds 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 TOURMALINE OIL and American Fds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TOURMALINE OIL CORP and American Fds 2015, you can compare the effects of market volatilities on TOURMALINE OIL and American Fds 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 TOURMALINE OIL with a short position of American Fds. Check out your portfolio center. Please also check ongoing floating volatility patterns of TOURMALINE OIL and American Fds.

Diversification Opportunities for TOURMALINE OIL and American Fds

0.78
  Correlation Coefficient

Poor diversification

The 3 months correlation between TOURMALINE and American is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding TOURMALINE OIL CORP and American Fds 2015 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Fds 2015 and TOURMALINE 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 TOURMALINE OIL CORP are associated (or correlated) with American Fds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Fds 2015 has no effect on the direction of TOURMALINE OIL i.e., TOURMALINE OIL and American Fds go up and down completely randomly.

Pair Corralation between TOURMALINE OIL and American Fds

Assuming the 90 days horizon TOURMALINE OIL CORP is expected to generate 5.27 times more return on investment than American Fds. However, TOURMALINE OIL is 5.27 times more volatile than American Fds 2015. It trades about 0.13 of its potential returns per unit of risk. American Fds 2015 is currently generating about 0.02 per unit of risk. If you would invest  1,186  in TOURMALINE OIL CORP on May 12, 2022 and sell it today you would earn a total of  4,699  from holding TOURMALINE OIL CORP or generate 396.21% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy99.8%
ValuesDaily Returns

TOURMALINE OIL CORP  vs.  American Fds 2015

 Performance (%) 
       Timeline  
TOURMALINE OIL CORP 
TOURMALINE Performance
6 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in TOURMALINE OIL CORP are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather sluggish essential indicators, TOURMALINE OIL exhibited solid returns over the last few months and may actually be approaching a breakup point.

TOURMALINE Price Channel

American Fds 2015 
American Performance
1 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in American Fds 2015 are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, American Fds is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

American Price Channel

TOURMALINE OIL and American Fds Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with TOURMALINE OIL and American Fds

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

TOURMALINE OIL CORP

Pair trading matchups for TOURMALINE OIL

The idea behind TOURMALINE OIL CORP and American Fds 2015 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.

American Fds 2015

Pair trading matchups for American Fds

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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..

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