Correlation Between EOG Resources and Carnarvon Petroleum
Can any of the company-specific risk be diversified away by investing in both EOG Resources and Carnarvon Petroleum 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 Carnarvon Petroleum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EOG Resources and Carnarvon Petroleum Limited, you can compare the effects of market volatilities on EOG Resources and Carnarvon Petroleum 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 Carnarvon Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of EOG Resources and Carnarvon Petroleum.
Diversification Opportunities for EOG Resources and Carnarvon Petroleum
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between EOG and Carnarvon is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding EOG Resources and Carnarvon Petroleum Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carnarvon Petroleum 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 Carnarvon Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carnarvon Petroleum has no effect on the direction of EOG Resources i.e., EOG Resources and Carnarvon Petroleum go up and down completely randomly.
Pair Corralation between EOG Resources and Carnarvon Petroleum
Considering the 90-day investment horizon EOG Resources is expected to generate 0.51 times more return on investment than Carnarvon Petroleum. However, EOG Resources is 1.96 times less risky than Carnarvon Petroleum. It trades about 0.25 of its potential returns per unit of risk. Carnarvon Petroleum Limited is currently generating about -0.21 per unit of risk. If you would invest 12,049 in EOG Resources on August 30, 2024 and sell it today you would earn a total of 1,260 from holding EOG Resources or generate 10.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
EOG Resources vs. Carnarvon Petroleum Limited
Performance |
| Timeline |
| EOG Resources |
| Carnarvon Petroleum |
EOG Resources and Carnarvon Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EOG Resources and Carnarvon Petroleum
The main advantage of trading using opposite EOG Resources and Carnarvon Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EOG Resources position performs unexpectedly, Carnarvon Petroleum 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 Carnarvon Petroleum will offset losses from the drop in Carnarvon Petroleum's long position.| EOG Resources vs. Permian Resources | EOG Resources vs. Devon Energy | EOG Resources vs. Coterra Energy | EOG Resources vs. Marathon Oil |
| Carnarvon Petroleum vs. 88 Energy Limited | Carnarvon Petroleum vs. MMEX Resources Corp | Carnarvon Petroleum vs. Africa Oil Corp | Carnarvon Petroleum vs. Reconnaissance Energy Africa |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |