Correlation Between Crescent Energy and Calumet Specialty
Can any of the company-specific risk be diversified away by investing in both Crescent Energy and Calumet Specialty 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 Energy and Calumet Specialty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Crescent Energy Co and Calumet Specialty Products, you can compare the effects of market volatilities on Crescent Energy and Calumet Specialty 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 Energy with a short position of Calumet Specialty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crescent Energy and Calumet Specialty.
Diversification Opportunities for Crescent Energy and Calumet Specialty
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Crescent and Calumet is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Crescent Energy Co and Calumet Specialty Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calumet Specialty and Crescent Energy 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 Energy Co are associated (or correlated) with Calumet Specialty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calumet Specialty has no effect on the direction of Crescent Energy i.e., Crescent Energy and Calumet Specialty go up and down completely randomly.
Pair Corralation between Crescent Energy and Calumet Specialty
Given the investment horizon of 90 days Crescent Energy Co is expected to generate 0.54 times more return on investment than Calumet Specialty. However, Crescent Energy Co is 1.85 times less risky than Calumet Specialty. It trades about 0.48 of its potential returns per unit of risk. Calumet Specialty Products is currently generating about 0.15 per unit of risk. If you would invest 1,202 in Crescent Energy Co on August 30, 2024 and sell it today you would earn a total of 279.00 from holding Crescent Energy Co or generate 23.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Crescent Energy Co vs. Calumet Specialty Products
Performance |
| Timeline |
| Crescent Energy |
| Calumet Specialty |
Crescent Energy and Calumet Specialty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Crescent Energy and Calumet Specialty
The main advantage of trading using opposite Crescent Energy and Calumet Specialty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crescent Energy position performs unexpectedly, Calumet Specialty 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 Calumet Specialty will offset losses from the drop in Calumet Specialty's long position.| Crescent Energy vs. Vital Energy | Crescent Energy vs. Permian Resources | Crescent Energy vs. Magnolia Oil Gas | Crescent Energy vs. Ring Energy |
| Calumet Specialty vs. Battalion Oil Corp | Calumet Specialty vs. Granite Ridge Resources | Calumet Specialty vs. GeoPark | Calumet Specialty vs. Crescent Energy Co |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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