Correlation Between Devon Energy and Petro Viking
Can any of the company-specific risk be diversified away by investing in both Devon Energy and Petro Viking 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 Devon Energy and Petro Viking into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Devon Energy and Petro Viking Energy, you can compare the effects of market volatilities on Devon Energy and Petro Viking 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 Devon Energy with a short position of Petro Viking. Check out your portfolio center. Please also check ongoing floating volatility patterns of Devon Energy and Petro Viking.
Diversification Opportunities for Devon Energy and Petro Viking
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Devon and Petro is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Devon Energy and Petro Viking Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Petro Viking Energy and Devon 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 Devon Energy are associated (or correlated) with Petro Viking. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Petro Viking Energy has no effect on the direction of Devon Energy i.e., Devon Energy and Petro Viking go up and down completely randomly.
Pair Corralation between Devon Energy and Petro Viking
Considering the 90-day investment horizon Devon Energy is expected to under-perform the Petro Viking. But the stock apears to be less risky and, when comparing its historical volatility, Devon Energy is 33.46 times less risky than Petro Viking. The stock trades about -0.03 of its potential returns per unit of risk. The Petro Viking Energy is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 22.00 in Petro Viking Energy on September 3, 2024 and sell it today you would lose (21.87) from holding Petro Viking Energy or give up 99.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Devon Energy vs. Petro Viking Energy
Performance |
| Timeline |
| Devon Energy |
| Petro Viking Energy |
Devon Energy and Petro Viking Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Devon Energy and Petro Viking
The main advantage of trading using opposite Devon Energy and Petro Viking positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Devon Energy position performs unexpectedly, Petro Viking 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 Petro Viking will offset losses from the drop in Petro Viking's long position.| Devon Energy vs. Coterra Energy | Devon Energy vs. Diamondback Energy | Devon Energy vs. EOG Resources | Devon Energy vs. ConocoPhillips |
| Petro Viking vs. Otto Energy Limited | Petro Viking vs. Foothills Exploration | Petro Viking vs. MMEX Resources Corp | Petro Viking vs. 1st NRG 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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