Correlation Between EnQuest PLC and ConocoPhillips
Can any of the company-specific risk be diversified away by investing in both EnQuest PLC and ConocoPhillips 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 EnQuest PLC and ConocoPhillips into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EnQuest PLC and ConocoPhillips, you can compare the effects of market volatilities on EnQuest PLC and ConocoPhillips 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 EnQuest PLC with a short position of ConocoPhillips. Check out your portfolio center. Please also check ongoing floating volatility patterns of EnQuest PLC and ConocoPhillips.
Diversification Opportunities for EnQuest PLC and ConocoPhillips
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between EnQuest and ConocoPhillips is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding EnQuest PLC and ConocoPhillips in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ConocoPhillips and EnQuest PLC 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 EnQuest PLC are associated (or correlated) with ConocoPhillips. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ConocoPhillips has no effect on the direction of EnQuest PLC i.e., EnQuest PLC and ConocoPhillips go up and down completely randomly.
Pair Corralation between EnQuest PLC and ConocoPhillips
Assuming the 90 days horizon EnQuest PLC is expected to generate 2.92 times more return on investment than ConocoPhillips. However, EnQuest PLC is 2.92 times more volatile than ConocoPhillips. It trades about 0.02 of its potential returns per unit of risk. ConocoPhillips is currently generating about 0.04 per unit of risk. If you would invest 14.00 in EnQuest PLC on September 2, 2024 and sell it today you would earn a total of 0.00 from holding EnQuest PLC or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
EnQuest PLC vs. ConocoPhillips
Performance |
| Timeline |
| EnQuest PLC |
| ConocoPhillips |
EnQuest PLC and ConocoPhillips Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EnQuest PLC and ConocoPhillips
The main advantage of trading using opposite EnQuest PLC and ConocoPhillips positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EnQuest PLC position performs unexpectedly, ConocoPhillips 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 ConocoPhillips will offset losses from the drop in ConocoPhillips' long position.| EnQuest PLC vs. ADX Energy | EnQuest PLC vs. Pine Cliff Energy | EnQuest PLC vs. AER Energy Resources | EnQuest PLC vs. Headwater Exploration |
| ConocoPhillips vs. Diamondback Energy | ConocoPhillips vs. APA Corporation | ConocoPhillips vs. Hess Corporation | ConocoPhillips vs. Coterra 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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