Correlation Between EOG Resources and Schulz SA
Can any of the company-specific risk be diversified away by investing in both EOG Resources and Schulz SA 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 EOG Resources and Schulz SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EOG Resources and Schulz SA, you can compare the effects of market volatilities on EOG Resources and Schulz SA 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 EOG Resources with a short position of Schulz SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of EOG Resources and Schulz SA.
Diversification Opportunities for EOG Resources and Schulz SA
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between EOG and Schulz is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding EOG Resources and Schulz SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schulz SA and EOG Resources 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 EOG Resources are associated (or correlated) with Schulz SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schulz SA has no effect on the direction of EOG Resources i.e., EOG Resources and Schulz SA go up and down completely randomly.
Pair Corralation between EOG Resources and Schulz SA
Assuming the 90 days trading horizon EOG Resources is expected to generate 1.31 times more return on investment than Schulz SA. However, EOG Resources is 1.31 times more volatile than Schulz SA. It trades about 0.03 of its potential returns per unit of risk. Schulz SA is currently generating about 0.04 per unit of risk. If you would invest 32,069 in EOG Resources on August 30, 2024 and sell it today you would earn a total of 7,711 from holding EOG Resources or generate 24.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 78.4% |
| Values | Daily Returns |
EOG Resources vs. Schulz SA
Performance |
| Timeline |
| EOG Resources |
| Schulz SA |
EOG Resources and Schulz SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EOG Resources and Schulz SA
The main advantage of trading using opposite EOG Resources and Schulz SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EOG Resources position performs unexpectedly, Schulz SA 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 Schulz SA will offset losses from the drop in Schulz SA's long position.| EOG Resources vs. UnitedHealth Group Incorporated | EOG Resources vs. Monster Beverage | EOG Resources vs. Healthpeak Properties | EOG Resources vs. MAHLE Metal Leve |
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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