Correlation Between Crescent Point and Occidental Petroleum
Can any of the company-specific risk be diversified away by investing in both Crescent Point and Occidental 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 Crescent Point and Occidental Petroleum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Crescent Point Energy and Occidental Petroleum, you can compare the effects of market volatilities on Crescent Point and Occidental 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 Crescent Point with a short position of Occidental Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crescent Point and Occidental Petroleum.
Diversification Opportunities for Crescent Point and Occidental Petroleum
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Crescent and Occidental is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Crescent Point Energy and Occidental Petroleum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Occidental Petroleum and Crescent Point 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 Crescent Point Energy are associated (or correlated) with Occidental Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Occidental Petroleum has no effect on the direction of Crescent Point i.e., Crescent Point and Occidental Petroleum go up and down completely randomly.
Pair Corralation between Crescent Point and Occidental Petroleum
Considering the 90-day investment horizon Crescent Point Energy is expected to generate 1.38 times more return on investment than Occidental Petroleum. However, Crescent Point is 1.38 times more volatile than Occidental Petroleum. It trades about 0.07 of its potential returns per unit of risk. Occidental Petroleum is currently generating about -0.06 per unit of risk. If you would invest 674.00 in Crescent Point Energy on September 14, 2024 and sell it today you would earn a total of 125.00 from holding Crescent Point Energy or generate 18.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 57.83% |
| Values | Daily Returns |
Crescent Point Energy vs. Occidental Petroleum
Performance |
| Timeline |
| Crescent Point Energy |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Occidental Petroleum |
Crescent Point and Occidental Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Crescent Point and Occidental Petroleum
The main advantage of trading using opposite Crescent Point and Occidental Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crescent Point position performs unexpectedly, Occidental 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 Occidental Petroleum will offset losses from the drop in Occidental Petroleum's long position.| Crescent Point vs. Vermilion Energy | Crescent Point vs. Canadian Natural Resources | Crescent Point vs. Baytex Energy Corp | Crescent Point vs. Ovintiv |
| Occidental Petroleum vs. Coterra Energy | Occidental Petroleum vs. Diamondback Energy | Occidental Petroleum vs. ConocoPhillips | Occidental Petroleum vs. EOG Resources |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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