Correlation Between California Resources and Chord Energy
Can any of the company-specific risk be diversified away by investing in both California Resources and Chord 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 California Resources and Chord Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between California Resources and Chord Energy Corp, you can compare the effects of market volatilities on California Resources and Chord 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 California Resources with a short position of Chord Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of California Resources and Chord Energy.
Diversification Opportunities for California Resources and Chord Energy
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between California and Chord is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding California Resources and Chord Energy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chord Energy Corp and California Resources 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 California Resources are associated (or correlated) with Chord Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chord Energy Corp has no effect on the direction of California Resources i.e., California Resources and Chord Energy go up and down completely randomly.
Pair Corralation between California Resources and Chord Energy
Assuming the 90 days horizon California Resources is expected to generate 5.13 times more return on investment than Chord Energy. However, California Resources is 5.13 times more volatile than Chord Energy Corp. It trades about 0.12 of its potential returns per unit of risk. Chord Energy Corp is currently generating about -0.12 per unit of risk. If you would invest 833.00 in California Resources on September 2, 2024 and sell it today you would earn a total of 879.00 from holding California Resources or generate 105.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 80.16% |
| Values | Daily Returns |
California Resources vs. Chord Energy Corp
Performance |
| Timeline |
| California Resources |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
| Chord Energy Corp |
California Resources and Chord Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with California Resources and Chord Energy
The main advantage of trading using opposite California Resources and Chord Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if California Resources position performs unexpectedly, Chord 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 Chord Energy will offset losses from the drop in Chord Energy's long position.| California Resources vs. Cardinal Energy | California Resources vs. Spartan Delta Corp | California Resources vs. Delek Group | California Resources vs. Bonterra Energy Corp |
| Chord Energy vs. Civitas Resources | Chord Energy vs. Coterra Energy | Chord Energy vs. HF Sinclair Corp | Chord Energy vs. Magnolia Oil Gas |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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