Correlation Between FEC Resources and Daybreak Oil
Can any of the company-specific risk be diversified away by investing in both FEC Resources and Daybreak Oil 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 FEC Resources and Daybreak Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FEC Resources and Daybreak Oil and, you can compare the effects of market volatilities on FEC Resources and Daybreak Oil 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 FEC Resources with a short position of Daybreak Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of FEC Resources and Daybreak Oil.
Diversification Opportunities for FEC Resources and Daybreak Oil
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between FEC and Daybreak is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding FEC Resources and Daybreak Oil and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daybreak Oil and FEC Resources 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 FEC Resources are associated (or correlated) with Daybreak Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daybreak Oil has no effect on the direction of FEC Resources i.e., FEC Resources and Daybreak Oil go up and down completely randomly.
Pair Corralation between FEC Resources and Daybreak Oil
Assuming the 90 days horizon FEC Resources is expected to generate 4.42 times more return on investment than Daybreak Oil. However, FEC Resources is 4.42 times more volatile than Daybreak Oil and. It trades about 0.14 of its potential returns per unit of risk. Daybreak Oil and is currently generating about 0.12 per unit of risk. If you would invest 0.48 in FEC Resources on June 2, 2025 and sell it today you would lose (0.21) from holding FEC Resources or give up 43.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FEC Resources vs. Daybreak Oil and
Performance |
| Timeline |
| FEC Resources |
| Daybreak Oil |
FEC Resources and Daybreak Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FEC Resources and Daybreak Oil
The main advantage of trading using opposite FEC Resources and Daybreak Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FEC Resources position performs unexpectedly, Daybreak Oil 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 Daybreak Oil will offset losses from the drop in Daybreak Oil's long position.| FEC Resources vs. Central Energy Partners | FEC Resources vs. BP PLC ADR | FEC Resources vs. US29366WAA45 | FEC Resources vs. KION GROUP AG |
| Daybreak Oil vs. Buru Energy Limited | Daybreak Oil vs. Altura Energy | Daybreak Oil vs. Arrow Exploration Corp | Daybreak Oil vs. FEC Resources |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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