Correlation Between Canadian Natural and ConocoPhillips
Can any of the company-specific risk be diversified away by investing in both Canadian Natural and ConocoPhillips 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 Canadian Natural and ConocoPhillips into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canadian Natural Resources and ConocoPhillips, you can compare the effects of market volatilities on Canadian Natural and ConocoPhillips 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 Canadian Natural with a short position of ConocoPhillips. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canadian Natural and ConocoPhillips.
Diversification Opportunities for Canadian Natural and ConocoPhillips
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Canadian and ConocoPhillips is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Canadian Natural Resources and ConocoPhillips in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ConocoPhillips and Canadian Natural 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 Canadian Natural Resources are associated (or correlated) with ConocoPhillips. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ConocoPhillips has no effect on the direction of Canadian Natural i.e., Canadian Natural and ConocoPhillips go up and down completely randomly.
Pair Corralation between Canadian Natural and ConocoPhillips
Assuming the 90 days horizon Canadian Natural Resources is expected to under-perform the ConocoPhillips. In addition to that, Canadian Natural is 1.06 times more volatile than ConocoPhillips. It trades about -0.39 of its total potential returns per unit of risk. ConocoPhillips is currently generating about -0.37 per unit of volatility. If you would invest 10,246 in ConocoPhillips on September 26, 2024 and sell it today you would lose (1,068) from holding ConocoPhillips or give up 10.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canadian Natural Resources vs. ConocoPhillips
Performance |
| Timeline |
| Canadian Natural Res |
| ConocoPhillips |
Canadian Natural and ConocoPhillips Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canadian Natural and ConocoPhillips
The main advantage of trading using opposite Canadian Natural and ConocoPhillips positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canadian Natural position performs unexpectedly, ConocoPhillips 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 ConocoPhillips will offset losses from the drop in ConocoPhillips' long position.| Canadian Natural vs. Alibaba Group Holding | Canadian Natural vs. ConocoPhillips | Canadian Natural vs. CNOOC | Canadian Natural vs. EOG Resources |
| ConocoPhillips vs. Alibaba Group Holding | ConocoPhillips vs. CNOOC | ConocoPhillips vs. EOG Resources | ConocoPhillips vs. Canadian Natural 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
Other Complementary Tools
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |