Correlation Between EOG Resources and Rockdale Resources
Can any of the company-specific risk be diversified away by investing in both EOG Resources and Rockdale Resources 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 Rockdale Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EOG Resources and Rockdale Resources Corp, you can compare the effects of market volatilities on EOG Resources and Rockdale Resources 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 Rockdale Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of EOG Resources and Rockdale Resources.
Diversification Opportunities for EOG Resources and Rockdale Resources
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between EOG and Rockdale is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding EOG Resources and Rockdale Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rockdale Resources Corp 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 Rockdale Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rockdale Resources Corp has no effect on the direction of EOG Resources i.e., EOG Resources and Rockdale Resources go up and down completely randomly.
Pair Corralation between EOG Resources and Rockdale Resources
Considering the 90-day investment horizon EOG Resources is expected to generate 0.15 times more return on investment than Rockdale Resources. However, EOG Resources is 6.68 times less risky than Rockdale Resources. It trades about 0.07 of its potential returns per unit of risk. Rockdale Resources Corp is currently generating about -0.1 per unit of risk. If you would invest 11,796 in EOG Resources on September 1, 2024 and sell it today you would earn a total of 1,530 from holding EOG Resources or generate 12.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 78.57% |
| Values | Daily Returns |
EOG Resources vs. Rockdale Resources Corp
Performance |
| Timeline |
| EOG Resources |
| Rockdale Resources Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
EOG Resources and Rockdale Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EOG Resources and Rockdale Resources
The main advantage of trading using opposite EOG Resources and Rockdale Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EOG Resources position performs unexpectedly, Rockdale Resources 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 Rockdale Resources will offset losses from the drop in Rockdale Resources' long position.| EOG Resources vs. Epsilon Energy | EOG Resources vs. Crescent Energy Co | EOG Resources vs. Evolution Petroleum | EOG Resources vs. XXL Energy Corp |
| Rockdale Resources vs. AER Energy Resources | Rockdale Resources vs. Altura Energy | Rockdale Resources vs. Alamo Energy Corp | Rockdale Resources vs. Arete Industries |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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