Correlation Between Coterra Energy and Excelerate Energy
Can any of the company-specific risk be diversified away by investing in both Coterra Energy and Excelerate 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 Coterra Energy and Excelerate Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coterra Energy and Excelerate Energy, you can compare the effects of market volatilities on Coterra Energy and Excelerate 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 Coterra Energy with a short position of Excelerate Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coterra Energy and Excelerate Energy.
Diversification Opportunities for Coterra Energy and Excelerate Energy
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Coterra and Excelerate is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Coterra Energy and Excelerate Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Excelerate Energy and Coterra 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 Coterra Energy are associated (or correlated) with Excelerate Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Excelerate Energy has no effect on the direction of Coterra Energy i.e., Coterra Energy and Excelerate Energy go up and down completely randomly.
Pair Corralation between Coterra Energy and Excelerate Energy
Given the investment horizon of 90 days Coterra Energy is expected to generate 1.3 times less return on investment than Excelerate Energy. But when comparing it to its historical volatility, Coterra Energy is 1.55 times less risky than Excelerate Energy. It trades about 0.02 of its potential returns per unit of risk. Excelerate Energy is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 2,932 in Excelerate Energy on August 23, 2024 and sell it today you would earn a total of 110.00 from holding Excelerate Energy or generate 3.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Coterra Energy vs. Excelerate Energy
Performance |
| Timeline |
| Coterra Energy |
| Excelerate Energy |
Coterra Energy and Excelerate Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coterra Energy and Excelerate Energy
The main advantage of trading using opposite Coterra Energy and Excelerate Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coterra Energy position performs unexpectedly, Excelerate 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 Excelerate Energy will offset losses from the drop in Excelerate Energy's long position.| Coterra Energy vs. Devon Energy | Coterra Energy vs. Diamondback Energy | Coterra Energy vs. EOG Resources | Coterra Energy vs. ConocoPhillips |
| Excelerate Energy vs. Atlantica Sustainable Infrastructure | Excelerate Energy vs. Clearway Energy | Excelerate Energy vs. Brookfield Renewable Corp | Excelerate Energy vs. Nextera Energy Partners |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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