Correlation Between Callon Petroleum and Capricorn Energy
Can any of the company-specific risk be diversified away by investing in both Callon Petroleum and Capricorn 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 Callon Petroleum and Capricorn Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Callon Petroleum and Capricorn Energy PLC, you can compare the effects of market volatilities on Callon Petroleum and Capricorn 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 Callon Petroleum with a short position of Capricorn Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Callon Petroleum and Capricorn Energy.
Diversification Opportunities for Callon Petroleum and Capricorn Energy
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Callon and Capricorn is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Callon Petroleum and Capricorn Energy PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capricorn Energy PLC 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 Capricorn Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capricorn Energy PLC has no effect on the direction of Callon Petroleum i.e., Callon Petroleum and Capricorn Energy go up and down completely randomly.
Pair Corralation between Callon Petroleum and Capricorn Energy
If you would invest 569.00 in Capricorn Energy PLC on September 2, 2024 and sell it today you would earn a total of 1.00 from holding Capricorn Energy PLC or generate 0.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Callon Petroleum vs. Capricorn Energy PLC
Performance |
| Timeline |
| Callon Petroleum |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Capricorn Energy PLC |
Callon Petroleum and Capricorn Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Callon Petroleum and Capricorn Energy
The main advantage of trading using opposite Callon Petroleum and Capricorn Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Callon Petroleum position performs unexpectedly, Capricorn 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 Capricorn Energy will offset losses from the drop in Capricorn Energy's long position.| Callon Petroleum vs. SandRidge Energy | Callon Petroleum vs. Permian Resources | Callon Petroleum vs. Matador Resources | Callon Petroleum vs. Antero Resources Corp |
| Capricorn Energy vs. San Leon Energy | Capricorn Energy vs. Tullow Oil PLC | Capricorn Energy vs. Dno ASA | Capricorn Energy vs. PetroShale |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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