Correlation Between Vermilion Energy and Borders Southern

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

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

Diversification Opportunities for Vermilion Energy and Borders Southern

-0.27

Correlation Coefficient

Vermilion Energy  Borders Southern

Very good diversification

The 3 months correlation between Vermilion and Borders is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Vermilion Energy and Borders Southern Petroleum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Borders Southern Pet and Vermilion 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 Vermilion Energy are associated (or correlated) with Borders Southern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Borders Southern Pet has no effect on the direction of Vermilion Energy i.e., Vermilion Energy and Borders Southern go up and down completely randomly.

Pair Corralation between Vermilion Energy and Borders Southern

Considering the 90-day investment horizon Vermilion Energy is expected to generate 1.15 times more return on investment than Borders Southern. However, Vermilion Energy is 1.15 times more volatile than Borders Southern Petroleum. It trades about 0.06 of its potential returns per unit of risk. Borders Southern Petroleum is currently generating about -0.15 per unit of risk. If you would invest  932.00  in Vermilion Energy on September 5, 2024 and sell it today you would earn a total of  67.00  from holding Vermilion Energy or generate 7.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Vermilion Energy  vs.  Borders Southern Petroleum

Vermilion Energy

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Vermilion Energy are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating technical and fundamental indicators, Vermilion Energy may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Borders Southern Pet

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Borders Southern Petroleum has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Vermilion Energy and Borders Southern

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

The idea behind Vermilion Energy and Borders Southern Petroleum 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 Global Correlations module to find global opportunities by holding instruments from different markets.