Correlation Between Crescent Point and Permian Resources
Can any of the company-specific risk be diversified away by investing in both Crescent Point and Permian 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 Crescent Point and Permian Resources 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 Permian Resources, you can compare the effects of market volatilities on Crescent Point and Permian 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 Crescent Point with a short position of Permian Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crescent Point and Permian Resources.
Diversification Opportunities for Crescent Point and Permian Resources
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Crescent and Permian is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Crescent Point Energy and Permian Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Permian Resources 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 Permian Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Permian Resources has no effect on the direction of Crescent Point i.e., Crescent Point and Permian Resources go up and down completely randomly.
Pair Corralation between Crescent Point and Permian Resources
If you would invest 1,359 in Permian Resources on August 31, 2024 and sell it today you would earn a total of 200.00 from holding Permian Resources or generate 14.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
Crescent Point Energy vs. Permian Resources
Performance |
| Timeline |
| Crescent Point Energy |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Permian Resources |
Crescent Point and Permian Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Crescent Point and Permian Resources
The main advantage of trading using opposite Crescent Point and Permian Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crescent Point position performs unexpectedly, Permian 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 Permian Resources will offset losses from the drop in Permian Resources' long position.| Crescent Point vs. Vermilion Energy | Crescent Point vs. Canadian Natural Resources | Crescent Point vs. Baytex Energy Corp | Crescent Point vs. Ovintiv |
| Permian Resources vs. Devon Energy | Permian Resources vs. EOG Resources | Permian Resources vs. Coterra Energy | Permian Resources vs. Range 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 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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