Correlation Between Callon Petroleum and CPG Old
Can any of the company-specific risk be diversified away by investing in both Callon Petroleum and CPG Old 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 CPG Old into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Callon Petroleum and CPG Old, you can compare the effects of market volatilities on Callon Petroleum and CPG Old 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 CPG Old. Check out your portfolio center. Please also check ongoing floating volatility patterns of Callon Petroleum and CPG Old.
Diversification Opportunities for Callon Petroleum and CPG Old
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Callon and CPG is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Callon Petroleum and CPG Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CPG Old 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 CPG Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CPG Old has no effect on the direction of Callon Petroleum i.e., Callon Petroleum and CPG Old go up and down completely randomly.
Pair Corralation between Callon Petroleum and CPG Old
If you would invest 799.00 in CPG Old on November 1, 2024 and sell it today you would earn a total of 0.00 from holding CPG Old or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Callon Petroleum vs. CPG Old
Performance |
| Timeline |
| Callon Petroleum |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| CPG Old |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Callon Petroleum and CPG Old Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Callon Petroleum and CPG Old
The main advantage of trading using opposite Callon Petroleum and CPG Old positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Callon Petroleum position performs unexpectedly, CPG Old 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 CPG Old will offset losses from the drop in CPG Old's long position.| Callon Petroleum vs. SandRidge Energy | Callon Petroleum vs. Permian Resources | Callon Petroleum vs. Matador Resources | Callon Petroleum vs. Antero Resources Corp |
| CPG Old vs. Vermilion Energy | CPG Old vs. Canadian Natural Resources | CPG Old vs. Baytex Energy Corp | CPG Old vs. Ovintiv |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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