Correlation Between Crescent Energy and Parafin Corp
Can any of the company-specific risk be diversified away by investing in both Crescent Energy and Parafin Corp 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 Parafin Corp 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 Parafin Corp, you can compare the effects of market volatilities on Crescent Energy and Parafin Corp 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 Parafin Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crescent Energy and Parafin Corp.
Diversification Opportunities for Crescent Energy and Parafin Corp
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Crescent and Parafin is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Crescent Energy Co and Parafin Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Parafin 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 Parafin Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Parafin Corp has no effect on the direction of Crescent Energy i.e., Crescent Energy and Parafin Corp go up and down completely randomly.
Pair Corralation between Crescent Energy and Parafin Corp
Given the investment horizon of 90 days Crescent Energy Co is expected to generate 0.24 times more return on investment than Parafin Corp. However, Crescent Energy Co is 4.18 times less risky than Parafin Corp. It trades about 0.09 of its potential returns per unit of risk. Parafin Corp is currently generating about -0.11 per unit of risk. If you would invest 1,168 in Crescent Energy Co on September 14, 2024 and sell it today you would earn a total of 308.00 from holding Crescent Energy Co or generate 26.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 72.0% |
| Values | Daily Returns |
Crescent Energy Co vs. Parafin Corp
Performance |
| Timeline |
| Crescent Energy |
| Parafin Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Crescent Energy and Parafin Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Crescent Energy and Parafin Corp
The main advantage of trading using opposite Crescent Energy and Parafin Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crescent Energy position performs unexpectedly, Parafin Corp 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 Parafin Corp will offset losses from the drop in Parafin Corp's long position.| Crescent Energy vs. Exxon Mobil Corp | Crescent Energy vs. Chevron Corp | Crescent Energy vs. TotalEnergies SE ADR | Crescent Energy vs. Petroleo Brasileiro Petrobras |
| Parafin Corp vs. Imperial Res | Parafin Corp vs. Strat Petroleum | Parafin Corp vs. Century Petroleum Corp |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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