Correlation Between ConocoPhillips and ONEOK
Can any of the company-specific risk be diversified away by investing in both ConocoPhillips and ONEOK 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 ConocoPhillips and ONEOK into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ConocoPhillips and ONEOK Inc, you can compare the effects of market volatilities on ConocoPhillips and ONEOK 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 ConocoPhillips with a short position of ONEOK. Check out your portfolio center. Please also check ongoing floating volatility patterns of ConocoPhillips and ONEOK.
Diversification Opportunities for ConocoPhillips and ONEOK
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between ConocoPhillips and ONEOK is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding ConocoPhillips and ONEOK Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ONEOK Inc and ConocoPhillips 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 ConocoPhillips are associated (or correlated) with ONEOK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ONEOK Inc has no effect on the direction of ConocoPhillips i.e., ConocoPhillips and ONEOK go up and down completely randomly.
Pair Corralation between ConocoPhillips and ONEOK
Assuming the 90 days trading horizon ConocoPhillips is expected to generate 2.33 times less return on investment than ONEOK. But when comparing it to its historical volatility, ConocoPhillips is 1.46 times less risky than ONEOK. It trades about 0.06 of its potential returns per unit of risk. ONEOK Inc is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 16,750 in ONEOK Inc on August 26, 2024 and sell it today you would earn a total of 10,212 from holding ONEOK Inc or generate 60.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 62.47% |
| Values | Daily Returns |
ConocoPhillips vs. ONEOK Inc
Performance |
| Timeline |
| ConocoPhillips |
| ONEOK Inc |
ConocoPhillips and ONEOK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ConocoPhillips and ONEOK
The main advantage of trading using opposite ConocoPhillips and ONEOK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ConocoPhillips position performs unexpectedly, ONEOK 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 ONEOK will offset losses from the drop in ONEOK's long position.| ConocoPhillips vs. Petro Rio SA | ConocoPhillips vs. Banco BTG Pactual | ConocoPhillips vs. Ambipar Participaes e | ConocoPhillips vs. Mliuz SA |
| ONEOK vs. Kinder Morgan Kansas | ONEOK vs. BTG Pactual Logstica | ONEOK vs. Plano Plano Desenvolvimento | ONEOK vs. Cable One |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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