Correlation Between Crescent Point and US Energy
Can any of the company-specific risk be diversified away by investing in both Crescent Point and US 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 Crescent Point and US Energy 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 US Energy Corp, you can compare the effects of market volatilities on Crescent Point and US 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 Crescent Point with a short position of US Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crescent Point and US Energy.
Diversification Opportunities for Crescent Point and US Energy
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Crescent and USEG is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Crescent Point Energy and US Energy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US Energy Corp 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 US Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US Energy Corp has no effect on the direction of Crescent Point i.e., Crescent Point and US Energy go up and down completely randomly.
Pair Corralation between Crescent Point and US Energy
If you would invest 142.00 in US Energy Corp on September 4, 2024 and sell it today you would earn a total of 35.00 from holding US Energy Corp or generate 24.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Crescent Point Energy vs. US Energy Corp
Performance |
| Timeline |
| Crescent Point Energy |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| US Energy Corp |
Crescent Point and US Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Crescent Point and US Energy
The main advantage of trading using opposite Crescent Point and US Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crescent Point position performs unexpectedly, US 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 US Energy will offset losses from the drop in US Energy's long position.| Crescent Point vs. Vermilion Energy | Crescent Point vs. Canadian Natural Resources | Crescent Point vs. Baytex Energy Corp | Crescent Point vs. Ovintiv |
| US Energy vs. Evolution Petroleum | US Energy vs. Ring Energy | US Energy vs. Gran Tierra Energy | US Energy vs. PEDEVCO 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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