Correlation Between Callon Petroleum and Tourmaline Oil
Can any of the company-specific risk be diversified away by investing in both Callon Petroleum and Tourmaline Oil 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 Tourmaline Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Callon Petroleum and Tourmaline Oil Corp, you can compare the effects of market volatilities on Callon Petroleum and Tourmaline Oil 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 Tourmaline Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Callon Petroleum and Tourmaline Oil.
Diversification Opportunities for Callon Petroleum and Tourmaline Oil
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Callon and Tourmaline is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Callon Petroleum and Tourmaline Oil Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tourmaline Oil Corp 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 Tourmaline Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tourmaline Oil Corp has no effect on the direction of Callon Petroleum i.e., Callon Petroleum and Tourmaline Oil go up and down completely randomly.
Pair Corralation between Callon Petroleum and Tourmaline Oil
If you would invest 4,518 in Tourmaline Oil Corp on September 2, 2024 and sell it today you would earn a total of 193.00 from holding Tourmaline Oil Corp or generate 4.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Callon Petroleum vs. Tourmaline Oil Corp
Performance |
| Timeline |
| Callon Petroleum |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Tourmaline Oil Corp |
Callon Petroleum and Tourmaline Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Callon Petroleum and Tourmaline Oil
The main advantage of trading using opposite Callon Petroleum and Tourmaline Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Callon Petroleum position performs unexpectedly, Tourmaline Oil 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 Tourmaline Oil will offset losses from the drop in Tourmaline Oil's long position.| Callon Petroleum vs. SandRidge Energy | Callon Petroleum vs. Permian Resources | Callon Petroleum vs. Matador Resources | Callon Petroleum vs. Antero Resources Corp |
| Tourmaline Oil vs. PrairieSky Royalty | Tourmaline Oil vs. Tamarack Valley Energy | Tourmaline Oil vs. MEG Energy Corp | Tourmaline Oil vs. Cardinal 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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