Correlation Between Coterra Energy and MV Oil
Can any of the company-specific risk be diversified away by investing in both Coterra Energy and MV Oil 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 MV Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coterra Energy and MV Oil Trust, you can compare the effects of market volatilities on Coterra Energy and MV Oil 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 MV Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coterra Energy and MV Oil.
Diversification Opportunities for Coterra Energy and MV Oil
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Coterra and MVO is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Coterra Energy and MV Oil Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MV Oil Trust 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 MV Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MV Oil Trust has no effect on the direction of Coterra Energy i.e., Coterra Energy and MV Oil go up and down completely randomly.
Pair Corralation between Coterra Energy and MV Oil
Given the investment horizon of 90 days Coterra Energy is expected to generate 1.49 times more return on investment than MV Oil. However, Coterra Energy is 1.49 times more volatile than MV Oil Trust. It trades about 0.32 of its potential returns per unit of risk. MV Oil Trust is currently generating about -0.04 per unit of risk. If you would invest 2,357 in Coterra Energy on August 28, 2024 and sell it today you would earn a total of 342.00 from holding Coterra Energy or generate 14.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Coterra Energy vs. MV Oil Trust
Performance |
| Timeline |
| Coterra Energy |
| MV Oil Trust |
Coterra Energy and MV Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coterra Energy and MV Oil
The main advantage of trading using opposite Coterra Energy and MV Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coterra Energy position performs unexpectedly, MV Oil 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 MV Oil will offset losses from the drop in MV Oil's long position.| Coterra Energy vs. Devon Energy | Coterra Energy vs. Diamondback Energy | Coterra Energy vs. EOG Resources | Coterra Energy vs. ConocoPhillips |
| MV Oil vs. North European Oil | MV Oil vs. Permianville Royalty Trust | MV Oil vs. Cross Timbers Royalty | MV Oil vs. Mesa 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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