Correlation Between Barnwell Industries and Camber Energy

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

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

Diversification Opportunities for Barnwell Industries and Camber Energy

-0.75

Correlation Coefficient

Barnwell Industries  Camber Energy

Pay attention - limited upside

The 3 months correlation between Barnwell and Camber is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Barnwell Industries and Camber Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Camber Energy and Barnwell Industries 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 Barnwell Industries 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 Barnwell Industries i.e., Barnwell Industries and Camber Energy go up and down completely randomly.

Pair Corralation between Barnwell Industries and Camber Energy

Considering the 90-day investment horizon Barnwell Industries is expected to under-perform the Camber Energy. But the stock apears to be less risky and, when comparing its historical volatility, Barnwell Industries is 1.1 times less risky than Camber Energy. The stock trades about -0.07 of its potential returns per unit of risk. The Camber Energy is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  17.00  in Camber Energy on February 26, 2024 and sell it today you would earn a total of  0.00  from holding Camber Energy or generate 0.0% return on investment over 90 days.

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

Barnwell Industries  vs.  Camber Energy

Barnwell Industries

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Barnwell Industries are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Barnwell Industries displayed solid returns over the last few months and may actually be approaching a breakup point.

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 fairly strong technical and fundamental indicators, Camber Energy is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Barnwell Industries and Camber Energy

The main advantage of trading using opposite Barnwell Industries and Camber Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barnwell Industries 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 Barnwell Industries 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.