Correlation Between Tourmaline Oil and ADF
Can any of the company-specific risk be diversified away by investing in both Tourmaline Oil and ADF 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 ADF 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 ADF Group, you can compare the effects of market volatilities on Tourmaline Oil and ADF 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 ADF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tourmaline Oil and ADF.
Diversification Opportunities for Tourmaline Oil and ADF
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Tourmaline and ADF is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Tourmaline Oil Corp and ADF Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ADF Group 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 ADF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ADF Group has no effect on the direction of Tourmaline Oil i.e., Tourmaline Oil and ADF go up and down completely randomly.
Pair Corralation between Tourmaline Oil and ADF
Assuming the 90 days trading horizon Tourmaline Oil Corp is expected to under-perform the ADF. But the stock apears to be less risky and, when comparing its historical volatility, Tourmaline Oil Corp is 4.26 times less risky than ADF. The stock trades about 0.0 of its potential returns per unit of risk. The ADF Group is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 623.00 in ADF Group on April 24, 2025 and sell it today you would earn a total of 407.00 from holding ADF Group or generate 65.33% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Tourmaline Oil Corp vs. ADF Group
Performance |
Timeline |
Tourmaline Oil Corp |
ADF Group |
Tourmaline Oil and ADF Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Tourmaline Oil and ADF
The main advantage of trading using opposite Tourmaline Oil and ADF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tourmaline Oil position performs unexpectedly, ADF 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 ADF will offset losses from the drop in ADF's long position.Tourmaline Oil vs. ARC Resources | Tourmaline Oil vs. Whitecap Resources | Tourmaline Oil vs. MEG Energy Corp | Tourmaline Oil vs. Birchcliff Energy |
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 CEOs Directory module to screen CEOs from public companies around the world.
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