Correlation Between Crescent Energy and North European
Can any of the company-specific risk be diversified away by investing in both Crescent Energy and North European 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 North European 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 North European Oil, you can compare the effects of market volatilities on Crescent Energy and North European 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 North European. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crescent Energy and North European.
Diversification Opportunities for Crescent Energy and North European
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Crescent and North is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Crescent Energy Co and North European Oil in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on North European Oil 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 North European. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of North European Oil has no effect on the direction of Crescent Energy i.e., Crescent Energy and North European go up and down completely randomly.
Pair Corralation between Crescent Energy and North European
Given the investment horizon of 90 days Crescent Energy Co is expected to generate 0.7 times more return on investment than North European. However, Crescent Energy Co is 1.44 times less risky than North European. It trades about 0.03 of its potential returns per unit of risk. North European Oil is currently generating about -0.03 per unit of risk. If you would invest 1,157 in Crescent Energy Co on August 27, 2024 and sell it today you would earn a total of 371.00 from holding Crescent Energy Co or generate 32.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Crescent Energy Co vs. North European Oil
Performance |
| Timeline |
| Crescent Energy |
| North European Oil |
Crescent Energy and North European Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Crescent Energy and North European
The main advantage of trading using opposite Crescent Energy and North European positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crescent Energy position performs unexpectedly, North European 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 North European will offset losses from the drop in North European's long position.| Crescent Energy vs. Vital Energy | Crescent Energy vs. Permian Resources | Crescent Energy vs. Magnolia Oil Gas | Crescent Energy vs. Ring Energy |
| North European vs. Cross Timbers Royalty | North European vs. VOC Energy Trust | North European vs. Sabine Royalty Trust | North European vs. Permianville Royalty Trust |
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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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