Correlation Between Crescent Point and Vital Energy
Can any of the company-specific risk be diversified away by investing in both Crescent Point and Vital 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 Vital 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 Vital Energy, you can compare the effects of market volatilities on Crescent Point and Vital 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 Vital Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crescent Point and Vital Energy.
Diversification Opportunities for Crescent Point and Vital Energy
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Crescent and Vital is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Crescent Point Energy and Vital Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vital Energy 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 Vital Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vital Energy has no effect on the direction of Crescent Point i.e., Crescent Point and Vital Energy go up and down completely randomly.
Pair Corralation between Crescent Point and Vital Energy
If you would invest 2,671 in Vital Energy on August 27, 2024 and sell it today you would earn a total of 567.00 from holding Vital Energy or generate 21.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Crescent Point Energy vs. Vital Energy
Performance |
| Timeline |
| Crescent Point Energy |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Vital Energy |
Crescent Point and Vital Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Crescent Point and Vital Energy
The main advantage of trading using opposite Crescent Point and Vital Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crescent Point position performs unexpectedly, Vital 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 Vital Energy will offset losses from the drop in Vital 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 |
| Vital Energy vs. SM Energy Co | Vital Energy vs. Permian Resources | Vital Energy vs. Matador Resources | Vital Energy vs. Obsidian 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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