Correlation Between Battalion Oil and Calumet Specialty
Can any of the company-specific risk be diversified away by investing in both Battalion Oil and Calumet Specialty 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 Battalion Oil and Calumet Specialty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Battalion Oil Corp and Calumet Specialty Products, you can compare the effects of market volatilities on Battalion Oil and Calumet Specialty 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 Battalion Oil with a short position of Calumet Specialty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Battalion Oil and Calumet Specialty.
Diversification Opportunities for Battalion Oil and Calumet Specialty
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Battalion and Calumet is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Battalion Oil Corp and Calumet Specialty Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calumet Specialty and Battalion Oil 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 Battalion Oil Corp are associated (or correlated) with Calumet Specialty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calumet Specialty has no effect on the direction of Battalion Oil i.e., Battalion Oil and Calumet Specialty go up and down completely randomly.
Pair Corralation between Battalion Oil and Calumet Specialty
Given the investment horizon of 90 days Battalion Oil Corp is expected to under-perform the Calumet Specialty. In addition to that, Battalion Oil is 3.2 times more volatile than Calumet Specialty Products. It trades about -0.18 of its total potential returns per unit of risk. Calumet Specialty Products is currently generating about 0.15 per unit of volatility. If you would invest 2,013 in Calumet Specialty Products on August 30, 2024 and sell it today you would earn a total of 227.00 from holding Calumet Specialty Products or generate 11.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Battalion Oil Corp vs. Calumet Specialty Products
Performance |
| Timeline |
| Battalion Oil Corp |
| Calumet Specialty |
Battalion Oil and Calumet Specialty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Battalion Oil and Calumet Specialty
The main advantage of trading using opposite Battalion Oil and Calumet Specialty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Battalion Oil position performs unexpectedly, Calumet Specialty 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 Calumet Specialty will offset losses from the drop in Calumet Specialty's long position.| Battalion Oil vs. Devon Energy | Battalion Oil vs. ConocoPhillips | Battalion Oil vs. Diamondback Energy | Battalion Oil vs. Occidental Petroleum |
| Calumet Specialty vs. Battalion Oil Corp | Calumet Specialty vs. Granite Ridge Resources | Calumet Specialty vs. GeoPark | Calumet Specialty vs. Crescent Energy Co |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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