Correlation Between Imperial Petroleum and Camber Energy

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

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

Diversification Opportunities for Imperial Petroleum and Camber Energy

0.69

Correlation Coefficient

Imperial Petroleum  Camber Energy

Poor diversification

The 3 months correlation between Imperial and Camber is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Imperial Petroleum and Camber Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Camber Energy and Imperial Petroleum 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 Imperial Petroleum are associated (or correlated) with Camber Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Camber Energy has no effect on the direction of Imperial Petroleum i.e., Imperial Petroleum and Camber Energy go up and down completely randomly.

Pair Corralation between Imperial Petroleum and Camber Energy

Given the investment horizon of 90 days Imperial Petroleum is expected to under-perform the Camber Energy. But the stock apears to be less risky and, when comparing its historical volatility, Imperial Petroleum is 2.78 times less risky than Camber Energy. The stock trades about -0.28 of its potential returns per unit of risk. The Camber Energy is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest  2.12  in Camber Energy on September 2, 2024 and sell it today you would lose (0.50) from holding Camber Energy or give up 23.58% of portfolio value over 90 days.

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

Imperial Petroleum  vs.  Camber Energy

Imperial Petroleum

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Imperial Petroleum has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Camber Energy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Camber Energy has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Imperial Petroleum and Camber Energy

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

The idea behind Imperial Petroleum and Camber Energy 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.

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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.