Correlation Between Crescent Energy and California Resources
Can any of the company-specific risk be diversified away by investing in both Crescent Energy and California Resources 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 California Resources 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 California Resources Corp, you can compare the effects of market volatilities on Crescent Energy and California Resources 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 California Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crescent Energy and California Resources.
Diversification Opportunities for Crescent Energy and California Resources
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Crescent and California is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Crescent Energy Co and California Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on California Resources Corp 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 California Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of California Resources Corp has no effect on the direction of Crescent Energy i.e., Crescent Energy and California Resources go up and down completely randomly.
Pair Corralation between Crescent Energy and California Resources
Given the investment horizon of 90 days Crescent Energy Co is expected to generate 0.96 times more return on investment than California Resources. However, Crescent Energy Co is 1.04 times less risky than California Resources. It trades about 0.51 of its potential returns per unit of risk. California Resources Corp is currently generating about 0.25 per unit of risk. If you would invest 1,210 in Crescent Energy Co on August 28, 2024 and sell it today you would earn a total of 275.00 from holding Crescent Energy Co or generate 22.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Crescent Energy Co vs. California Resources Corp
Performance |
| Timeline |
| Crescent Energy |
| California Resources Corp |
Crescent Energy and California Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Crescent Energy and California Resources
The main advantage of trading using opposite Crescent Energy and California Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crescent Energy position performs unexpectedly, California Resources 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 California Resources will offset losses from the drop in California Resources' long position.| Crescent Energy vs. Vital Energy | Crescent Energy vs. Permian Resources | Crescent Energy vs. Magnolia Oil Gas | Crescent Energy vs. Ring Energy |
| California Resources vs. Berry Petroleum Corp | California Resources vs. Magnolia Oil Gas | California Resources vs. Comstock Resources | California Resources vs. Gulfport Energy Operating |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals |