Correlation Between Crescent Energy and Vital Energy
Can any of the company-specific risk be diversified away by investing in both Crescent Energy and Vital 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 Crescent Energy and Vital Energy 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 Vital Energy, you can compare the effects of market volatilities on Crescent Energy and Vital 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 Crescent Energy with a short position of Vital Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crescent Energy and Vital Energy.
Diversification Opportunities for Crescent Energy and Vital Energy
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Crescent and Vital is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Crescent Energy Co and Vital Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vital Energy 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 Vital Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vital Energy has no effect on the direction of Crescent Energy i.e., Crescent Energy and Vital Energy go up and down completely randomly.
Pair Corralation between Crescent Energy and Vital Energy
Given the investment horizon of 90 days Crescent Energy Co is expected to generate 1.0 times more return on investment than Vital Energy. However, Crescent Energy Co is 1.0 times less risky than Vital Energy. It trades about 0.06 of its potential returns per unit of risk. Vital Energy is currently generating about -0.04 per unit of risk. If you would invest 1,102 in Crescent Energy Co on August 24, 2024 and sell it today you would earn a total of 416.00 from holding Crescent Energy Co or generate 37.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Crescent Energy Co vs. Vital Energy
Performance |
| Timeline |
| Crescent Energy |
| Vital Energy |
Crescent Energy and Vital Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Crescent Energy and Vital Energy
The main advantage of trading using opposite Crescent Energy and Vital Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crescent Energy position performs unexpectedly, Vital 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 Vital Energy will offset losses from the drop in Vital Energy's long position.| Crescent Energy vs. Houston American Energy | Crescent Energy vs. Mexco Energy | Crescent Energy vs. Ring Energy | Crescent Energy vs. Permianville Royalty Trust |
| Vital Energy vs. SM Energy Co | Vital Energy vs. Permian Resources | Vital Energy vs. Matador Resources | Vital Energy vs. Obsidian Energy |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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