Correlation Between Battalion Oil and Crescent Energy
Can any of the company-specific risk be diversified away by investing in both Battalion Oil and Crescent 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 Battalion Oil and Crescent Energy 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 Crescent Energy Co, you can compare the effects of market volatilities on Battalion Oil and Crescent 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 Battalion Oil with a short position of Crescent Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Battalion Oil and Crescent Energy.
Diversification Opportunities for Battalion Oil and Crescent Energy
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Battalion and Crescent is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Battalion Oil Corp and Crescent Energy Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crescent Energy 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 Crescent Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crescent Energy has no effect on the direction of Battalion Oil i.e., Battalion Oil and Crescent Energy go up and down completely randomly.
Pair Corralation between Battalion Oil and Crescent Energy
Given the investment horizon of 90 days Battalion Oil Corp is expected to under-perform the Crescent Energy. In addition to that, Battalion Oil is 4.09 times more volatile than Crescent Energy Co. It trades about -0.01 of its total potential returns per unit of risk. Crescent Energy Co is currently generating about 0.07 per unit of volatility. If you would invest 1,037 in Crescent Energy Co on November 3, 2024 and sell it today you would earn a total of 469.00 from holding Crescent Energy Co or generate 45.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Battalion Oil Corp vs. Crescent Energy Co
Performance |
| Timeline |
| Battalion Oil Corp |
| Crescent Energy |
Battalion Oil and Crescent Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Battalion Oil and Crescent Energy
The main advantage of trading using opposite Battalion Oil and Crescent Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Battalion Oil position performs unexpectedly, Crescent 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 Crescent Energy will offset losses from the drop in Crescent Energy's long position.| Battalion Oil vs. Epsilon Energy | Battalion Oil vs. Citizens Community Bancorp | Battalion Oil vs. Perma Pipe International Holdings | Battalion Oil vs. Amplify Energy Corp |
| Crescent Energy vs. Vital Energy | Crescent Energy vs. Permian Resources | Crescent Energy vs. Magnolia Oil Gas | Crescent Energy vs. Ring Energy |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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