Correlation Between Callon Petroleum and Comstock Resources
Can any of the company-specific risk be diversified away by investing in both Callon Petroleum and Comstock Resources 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 Comstock Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Callon Petroleum and Comstock Resources, you can compare the effects of market volatilities on Callon Petroleum and Comstock Resources 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 Comstock Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Callon Petroleum and Comstock Resources.
Diversification Opportunities for Callon Petroleum and Comstock Resources
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Callon and Comstock is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Callon Petroleum and Comstock Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Comstock Resources 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 Comstock Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Comstock Resources has no effect on the direction of Callon Petroleum i.e., Callon Petroleum and Comstock Resources go up and down completely randomly.
Pair Corralation between Callon Petroleum and Comstock Resources
If you would invest 1,194 in Comstock Resources on August 28, 2024 and sell it today you would earn a total of 357.00 from holding Comstock Resources or generate 29.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Callon Petroleum vs. Comstock Resources
Performance |
| Timeline |
| Callon Petroleum |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Comstock Resources |
Callon Petroleum and Comstock Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Callon Petroleum and Comstock Resources
The main advantage of trading using opposite Callon Petroleum and Comstock Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Callon Petroleum position performs unexpectedly, Comstock Resources 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 Comstock Resources will offset losses from the drop in Comstock Resources' long position.| Callon Petroleum vs. SandRidge Energy | Callon Petroleum vs. Permian Resources | Callon Petroleum vs. Matador Resources | Callon Petroleum vs. Antero Resources Corp |
| Comstock Resources vs. Range Resources Corp | Comstock Resources vs. Permian Resources | Comstock Resources vs. EQT Corporation | Comstock Resources vs. Vital 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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