Correlation Between Callon Petroleum and ConocoPhillips
Can any of the company-specific risk be diversified away by investing in both Callon Petroleum and ConocoPhillips 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 Callon Petroleum and ConocoPhillips into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Callon Petroleum and ConocoPhillips, you can compare the effects of market volatilities on Callon Petroleum and ConocoPhillips 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 Callon Petroleum with a short position of ConocoPhillips. Check out your portfolio center. Please also check ongoing floating volatility patterns of Callon Petroleum and ConocoPhillips.
Diversification Opportunities for Callon Petroleum and ConocoPhillips
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Callon and ConocoPhillips is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Callon Petroleum and ConocoPhillips in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ConocoPhillips and Callon Petroleum 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 Callon Petroleum are associated (or correlated) with ConocoPhillips. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ConocoPhillips has no effect on the direction of Callon Petroleum i.e., Callon Petroleum and ConocoPhillips go up and down completely randomly.
Pair Corralation between Callon Petroleum and ConocoPhillips
If you would invest 10,378 in ConocoPhillips on August 24, 2024 and sell it today you would earn a total of 812.00 from holding ConocoPhillips or generate 7.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 4.35% |
| Values | Daily Returns |
Callon Petroleum vs. ConocoPhillips
Performance |
| Timeline |
| Callon Petroleum |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| ConocoPhillips |
Callon Petroleum and ConocoPhillips Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Callon Petroleum and ConocoPhillips
The main advantage of trading using opposite Callon Petroleum and ConocoPhillips positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Callon Petroleum position performs unexpectedly, ConocoPhillips 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 ConocoPhillips will offset losses from the drop in ConocoPhillips' long position.| Callon Petroleum vs. SandRidge Energy | Callon Petroleum vs. Permian Resources | Callon Petroleum vs. Matador Resources | Callon Petroleum vs. Antero Resources Corp |
| ConocoPhillips vs. Diamondback Energy | ConocoPhillips vs. APA Corporation | ConocoPhillips vs. Hess Corporation | ConocoPhillips vs. Coterra 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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