Correlation Between Canacol Energy and Hemisphere Energy

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

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

Diversification Opportunities for Canacol Energy and Hemisphere Energy

-0.79

Correlation Coefficient

Canacol Energy  Hemisphere Energy

Pay attention - limited upside

The 3 months correlation between Canacol and Hemisphere is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Canacol Energy and Hemisphere Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hemisphere Energy and Canacol 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 Canacol Energy are associated (or correlated) with Hemisphere Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hemisphere Energy has no effect on the direction of Canacol Energy i.e., Canacol Energy and Hemisphere Energy go up and down completely randomly.

Pair Corralation between Canacol Energy and Hemisphere Energy

Assuming the 90 days trading horizon Canacol Energy is expected to under-perform the Hemisphere Energy. In addition to that, Canacol Energy is 1.8 times more volatile than Hemisphere Energy. It trades about -0.18 of its total potential returns per unit of risk. Hemisphere Energy is currently generating about 0.16 per unit of volatility. If you would invest  169.00  in Hemisphere Energy on April 20, 2025 and sell it today you would earn a total of  26.00  from holding Hemisphere Energy or generate 15.38% return on investment over 90 days.

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

Canacol Energy  vs.  Hemisphere Energy

Canacol Energy

Risk-Adjusted Performance

Very Weak

Over the last 90 days Canacol Energy has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in August 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Hemisphere Energy

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Hemisphere Energy are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Hemisphere Energy showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Canacol Energy and Hemisphere Energy

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

The idea behind Canacol Energy and Hemisphere 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.