Correlation Between Baytex Energy and Moolec Science

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

By analyzing existing cross correlation between Baytex Energy Corp and Moolec Science SA, you can compare the effects of market volatilities on Baytex Energy and Moolec Science 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 Baytex Energy with a short position of Moolec Science. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baytex Energy and Moolec Science.

Diversification Opportunities for Baytex Energy and Moolec Science

-0.03

Correlation Coefficient

Baytex Energy  Moolec Science

Good diversification

The 3 months correlation between Baytex and Moolec is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Baytex Energy Corp and Moolec Science SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moolec Science SA and Baytex 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 Baytex Energy Corp are associated (or correlated) with Moolec Science. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Moolec Science SA has no effect on the direction of Baytex Energy i.e., Baytex Energy and Moolec Science go up and down completely randomly.

Pair Corralation between Baytex Energy and Moolec Science

Considering the 90-day investment horizon Baytex Energy is expected to generate 4.05 times less return on investment than Moolec Science. But when comparing it to its historical volatility, Baytex Energy Corp is 4.81 times less risky than Moolec Science. It trades about 0.14 of its potential returns per unit of risk. Moolec Science SA is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  1.36  in Moolec Science SA on May 2, 2025 and sell it today you would earn a total of  0.50  from holding Moolec Science SA or generate 36.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	86.89%
Values	Daily Returns

Baytex Energy Corp  vs.  Moolec Science SA

Baytex Energy Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Baytex Energy Corp are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, Baytex Energy exhibited solid returns over the last few months and may actually be approaching a breakup point.

Moolec Science SA

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Moolec Science SA are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal fundamental indicators, Moolec Science showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Baytex Energy and Moolec Science

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

The idea behind Baytex Energy Corp and Moolec Science SA 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.