Correlation Between Civitas Resources and PrimeEnergy
Can any of the company-specific risk be diversified away by investing in both Civitas Resources and PrimeEnergy 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 Civitas Resources and PrimeEnergy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Civitas Resources and PrimeEnergy, you can compare the effects of market volatilities on Civitas Resources and PrimeEnergy 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 Civitas Resources with a short position of PrimeEnergy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Civitas Resources and PrimeEnergy.
Diversification Opportunities for Civitas Resources and PrimeEnergy
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Civitas and PrimeEnergy is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Civitas Resources and PrimeEnergy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PrimeEnergy and Civitas Resources 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 Civitas Resources are associated (or correlated) with PrimeEnergy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PrimeEnergy has no effect on the direction of Civitas Resources i.e., Civitas Resources and PrimeEnergy go up and down completely randomly.
Pair Corralation between Civitas Resources and PrimeEnergy
Given the investment horizon of 90 days Civitas Resources is expected to generate 9.88 times less return on investment than PrimeEnergy. But when comparing it to its historical volatility, Civitas Resources is 1.08 times less risky than PrimeEnergy. It trades about 0.01 of its potential returns per unit of risk. PrimeEnergy is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 7,712 in PrimeEnergy on August 27, 2024 and sell it today you would earn a total of 12,583 from holding PrimeEnergy or generate 163.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Civitas Resources vs. PrimeEnergy
Performance |
| Timeline |
| Civitas Resources |
| PrimeEnergy |
Civitas Resources and PrimeEnergy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Civitas Resources and PrimeEnergy
The main advantage of trading using opposite Civitas Resources and PrimeEnergy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Civitas Resources position performs unexpectedly, PrimeEnergy 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 PrimeEnergy will offset losses from the drop in PrimeEnergy's long position.| Civitas Resources vs. Magnolia Oil Gas | Civitas Resources vs. SM Energy Co | Civitas Resources vs. Range Resources Corp | Civitas Resources vs. Matador Resources |
| PrimeEnergy vs. Epsilon Energy | PrimeEnergy vs. Crescent Energy Co | PrimeEnergy vs. Evolution Petroleum | PrimeEnergy vs. MorningStar Partners, LP |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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