Correlation Between Arrow Exploration and Bonterra Energy
Can any of the company-specific risk be diversified away by investing in both Arrow Exploration and Bonterra 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 Arrow Exploration and Bonterra Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arrow Exploration Corp and Bonterra Energy Corp, you can compare the effects of market volatilities on Arrow Exploration and Bonterra 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 Arrow Exploration with a short position of Bonterra Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arrow Exploration and Bonterra Energy.
Diversification Opportunities for Arrow Exploration and Bonterra Energy
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Arrow and Bonterra is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Arrow Exploration Corp and Bonterra Energy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bonterra Energy Corp and Arrow Exploration 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 Arrow Exploration Corp are associated (or correlated) with Bonterra Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bonterra Energy Corp has no effect on the direction of Arrow Exploration i.e., Arrow Exploration and Bonterra Energy go up and down completely randomly.
Pair Corralation between Arrow Exploration and Bonterra Energy
Assuming the 90 days horizon Arrow Exploration is expected to generate 1.25 times less return on investment than Bonterra Energy. In addition to that, Arrow Exploration is 1.43 times more volatile than Bonterra Energy Corp. It trades about 0.09 of its total potential returns per unit of risk. Bonterra Energy Corp is currently generating about 0.16 per unit of volatility. If you would invest 361.00 in Bonterra Energy Corp on October 5, 2025 and sell it today you would earn a total of 99.00 from holding Bonterra Energy Corp or generate 27.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arrow Exploration Corp vs. Bonterra Energy Corp
Performance |
| Timeline |
| Arrow Exploration Corp |
| Bonterra Energy Corp |
Arrow Exploration and Bonterra Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arrow Exploration and Bonterra Energy
The main advantage of trading using opposite Arrow Exploration and Bonterra Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arrow Exploration position performs unexpectedly, Bonterra 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 Bonterra Energy will offset losses from the drop in Bonterra Energy's long position.| Arrow Exploration vs. Africa Energy Corp | Arrow Exploration vs. Orca Energy Group | Arrow Exploration vs. Touchstone Exploration | Arrow Exploration vs. New Stratus Energy |
| Bonterra Energy vs. Questerre Energy | Bonterra Energy vs. Tethys Petroleum | Bonterra Energy vs. Condor Energies | Bonterra Energy vs. Reconnaissance Energy Africa |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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