Correlation Between Canadian Natural and Earthstone Energy
Can any of the company-specific risk be diversified away by investing in both Canadian Natural and Earthstone 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 Canadian Natural and Earthstone Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canadian Natural Resources and Earthstone Energy, you can compare the effects of market volatilities on Canadian Natural and Earthstone 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 Canadian Natural with a short position of Earthstone Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canadian Natural and Earthstone Energy.
Diversification Opportunities for Canadian Natural and Earthstone Energy
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Canadian and Earthstone is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Canadian Natural Resources and Earthstone Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Earthstone Energy and Canadian Natural 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 Canadian Natural Resources are associated (or correlated) with Earthstone Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Earthstone Energy has no effect on the direction of Canadian Natural i.e., Canadian Natural and Earthstone Energy go up and down completely randomly.
Pair Corralation between Canadian Natural and Earthstone Energy
If you would invest 1,532 in Earthstone Energy on August 27, 2024 and sell it today you would earn a total of 0.00 from holding Earthstone Energy or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Canadian Natural Resources vs. Earthstone Energy
Performance |
| Timeline |
| Canadian Natural Res |
| Earthstone Energy |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Canadian Natural and Earthstone Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canadian Natural and Earthstone Energy
The main advantage of trading using opposite Canadian Natural and Earthstone Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canadian Natural position performs unexpectedly, Earthstone 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 Earthstone Energy will offset losses from the drop in Earthstone Energy's long position.| Canadian Natural vs. Baytex Energy Corp | Canadian Natural vs. Vermilion Energy | Canadian Natural vs. Obsidian Energy | Canadian Natural vs. Ovintiv |
| Earthstone Energy vs. Vital Energy | Earthstone Energy vs. Comstock Resources | Earthstone Energy vs. Magnolia Oil Gas | Earthstone Energy vs. Obsidian 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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