Correlation Between Total Energy and Frontera Energy

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

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

Diversification Opportunities for Total Energy and Frontera Energy

-0.36

Correlation Coefficient

Total Energy  Frontera Energy

Very good diversification

The 3 months correlation between Total and Frontera is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Total Energy Services and Frontera Energy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Frontera Energy Corp and Total 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 Total Energy Services are associated (or correlated) with Frontera Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Frontera Energy Corp has no effect on the direction of Total Energy i.e., Total Energy and Frontera Energy go up and down completely randomly.

Pair Corralation between Total Energy and Frontera Energy

Assuming the 90 days trading horizon Total Energy is expected to generate 1.38 times less return on investment than Frontera Energy. But when comparing it to its historical volatility, Total Energy Services is 1.05 times less risky than Frontera Energy. It trades about 0.05 of its potential returns per unit of risk. Frontera Energy Corp is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  597.00  in Frontera Energy Corp on August 24, 2025 and sell it today you would earn a total of  45.00  from holding Frontera Energy Corp or generate 7.54% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Total Energy Services  vs.  Frontera Energy Corp

Total Energy Services

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Total Energy Services are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Total Energy may actually be approaching a critical reversion point that can send shares even higher in December 2025.

Frontera Energy Corp

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Frontera Energy Corp are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental indicators, Frontera Energy may actually be approaching a critical reversion point that can send shares even higher in December 2025.

Pair Trading with Total Energy and Frontera Energy

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

The idea behind Total Energy Services and Frontera Energy Corp 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.