Correlation Between Calumet Specialty and Battalion Oil
Can any of the company-specific risk be diversified away by investing in both Calumet Specialty and Battalion Oil 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 Calumet Specialty and Battalion Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Calumet Specialty Products and Battalion Oil Corp, you can compare the effects of market volatilities on Calumet Specialty and Battalion Oil 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 Calumet Specialty with a short position of Battalion Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calumet Specialty and Battalion Oil.
Diversification Opportunities for Calumet Specialty and Battalion Oil
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Calumet and Battalion is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Calumet Specialty Products and Battalion Oil Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Battalion Oil Corp and Calumet Specialty 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 Calumet Specialty Products are associated (or correlated) with Battalion Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Battalion Oil Corp has no effect on the direction of Calumet Specialty i.e., Calumet Specialty and Battalion Oil go up and down completely randomly.
Pair Corralation between Calumet Specialty and Battalion Oil
Given the investment horizon of 90 days Calumet Specialty Products is expected to generate 0.29 times more return on investment than Battalion Oil. However, Calumet Specialty Products is 3.43 times less risky than Battalion Oil. It trades about 0.09 of its potential returns per unit of risk. Battalion Oil Corp is currently generating about -0.17 per unit of risk. If you would invest 2,133 in Calumet Specialty Products on September 1, 2024 and sell it today you would earn a total of 121.00 from holding Calumet Specialty Products or generate 5.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Calumet Specialty Products vs. Battalion Oil Corp
Performance |
| Timeline |
| Calumet Specialty |
| Battalion Oil Corp |
Calumet Specialty and Battalion Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Calumet Specialty and Battalion Oil
The main advantage of trading using opposite Calumet Specialty and Battalion Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calumet Specialty position performs unexpectedly, Battalion Oil 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 Battalion Oil will offset losses from the drop in Battalion Oil's long position.| Calumet Specialty vs. Battalion Oil Corp | Calumet Specialty vs. Granite Ridge Resources | Calumet Specialty vs. GeoPark | Calumet Specialty vs. Crescent Energy Co |
| Battalion Oil vs. Epsilon Energy | Battalion Oil vs. Citizens Community Bancorp | Battalion Oil vs. Perma Pipe International Holdings | Battalion Oil vs. Amplify Energy Corp |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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