Correlation Between Callon Petroleum and Evolution Petroleum
Can any of the company-specific risk be diversified away by investing in both Callon Petroleum and Evolution Petroleum 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 Evolution Petroleum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Callon Petroleum and Evolution Petroleum, you can compare the effects of market volatilities on Callon Petroleum and Evolution Petroleum 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 Evolution Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Callon Petroleum and Evolution Petroleum.
Diversification Opportunities for Callon Petroleum and Evolution Petroleum
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Callon and Evolution is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Callon Petroleum and Evolution Petroleum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evolution Petroleum 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 Evolution Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evolution Petroleum has no effect on the direction of Callon Petroleum i.e., Callon Petroleum and Evolution Petroleum go up and down completely randomly.
Pair Corralation between Callon Petroleum and Evolution Petroleum
If you would invest 528.00 in Evolution Petroleum on November 3, 2024 and sell it today you would earn a total of 3.00 from holding Evolution Petroleum or generate 0.57% 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. Evolution Petroleum
Performance |
| Timeline |
| Callon Petroleum |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Evolution Petroleum |
Callon Petroleum and Evolution Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Callon Petroleum and Evolution Petroleum
The main advantage of trading using opposite Callon Petroleum and Evolution Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Callon Petroleum position performs unexpectedly, Evolution Petroleum 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 Evolution Petroleum will offset losses from the drop in Evolution Petroleum's long position.| Callon Petroleum vs. SandRidge Energy | Callon Petroleum vs. Permian Resources | Callon Petroleum vs. Matador Resources | Callon Petroleum vs. Antero Resources Corp |
| Evolution Petroleum vs. GeoPark | Evolution Petroleum vs. Granite Ridge Resources | Evolution Petroleum vs. PHX Minerals | Evolution Petroleum vs. California Resources Corp |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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