Correlation Between Vaalco Energy and Crescent Energy
Can any of the company-specific risk be diversified away by investing in both Vaalco Energy and Crescent 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 Vaalco Energy and Crescent Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vaalco Energy and Crescent Energy Co, you can compare the effects of market volatilities on Vaalco Energy and Crescent 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 Vaalco Energy with a short position of Crescent Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vaalco Energy and Crescent Energy.
Diversification Opportunities for Vaalco Energy and Crescent Energy
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Vaalco and Crescent is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Vaalco Energy and Crescent Energy Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crescent Energy and Vaalco 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 Vaalco Energy are associated (or correlated) with Crescent Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crescent Energy has no effect on the direction of Vaalco Energy i.e., Vaalco Energy and Crescent Energy go up and down completely randomly.
Pair Corralation between Vaalco Energy and Crescent Energy
Considering the 90-day investment horizon Vaalco Energy is expected to generate 1.16 times more return on investment than Crescent Energy. However, Vaalco Energy is 1.16 times more volatile than Crescent Energy Co. It trades about 0.03 of its potential returns per unit of risk. Crescent Energy Co is currently generating about 0.03 per unit of risk. If you would invest 463.00 in Vaalco Energy on August 24, 2024 and sell it today you would earn a total of 78.00 from holding Vaalco Energy or generate 16.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vaalco Energy vs. Crescent Energy Co
Performance |
| Timeline |
| Vaalco Energy |
| Crescent Energy |
Vaalco Energy and Crescent Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vaalco Energy and Crescent Energy
The main advantage of trading using opposite Vaalco Energy and Crescent Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vaalco Energy position performs unexpectedly, Crescent 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 Crescent Energy will offset losses from the drop in Crescent Energy's long position.| Vaalco Energy vs. Epsilon Energy | Vaalco Energy vs. PHX Minerals | Vaalco Energy vs. Northern Oil Gas | Vaalco Energy vs. Gran Tierra Energy |
| Crescent Energy vs. Vital Energy | Crescent Energy vs. Permian Resources | Crescent Energy vs. Magnolia Oil Gas | Crescent Energy vs. Ring Energy |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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