Correlation Between Cardinal Energy and Civitas Resources
Can any of the company-specific risk be diversified away by investing in both Cardinal Energy and Civitas 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 Cardinal Energy and Civitas Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cardinal Energy and Civitas Resources, you can compare the effects of market volatilities on Cardinal Energy and Civitas 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 Cardinal Energy with a short position of Civitas Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cardinal Energy and Civitas Resources.
Diversification Opportunities for Cardinal Energy and Civitas Resources
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Cardinal and Civitas is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Cardinal Energy and Civitas Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Civitas Resources and Cardinal 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 Cardinal Energy are associated (or correlated) with Civitas Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Civitas Resources has no effect on the direction of Cardinal Energy i.e., Cardinal Energy and Civitas Resources go up and down completely randomly.
Pair Corralation between Cardinal Energy and Civitas Resources
Assuming the 90 days horizon Cardinal Energy is expected to under-perform the Civitas Resources. But the pink sheet apears to be less risky and, when comparing its historical volatility, Cardinal Energy is 35.21 times less risky than Civitas Resources. The pink sheet trades about 0.0 of its potential returns per unit of risk. The Civitas Resources is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 107.00 in Civitas Resources on August 25, 2024 and sell it today you would lose (90.00) from holding Civitas Resources or give up 84.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Cardinal Energy vs. Civitas Resources
Performance |
| Timeline |
| Cardinal Energy |
| Civitas Resources |
Cardinal Energy and Civitas Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cardinal Energy and Civitas Resources
The main advantage of trading using opposite Cardinal Energy and Civitas Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cardinal Energy position performs unexpectedly, Civitas 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 Civitas Resources will offset losses from the drop in Civitas Resources' long position.| Cardinal Energy vs. Petroleo Brasileiro Petrobras | Cardinal Energy vs. Equinor ASA ADR | Cardinal Energy vs. Eni SpA ADR | Cardinal Energy vs. YPF Sociedad Anonima |
| Civitas Resources vs. Legacy Education | Civitas Resources vs. NVIDIA | Civitas Resources vs. Apple Inc | Civitas Resources vs. Microsoft |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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