Correlation Between EOG Resources and EON Resources
Can any of the company-specific risk be diversified away by investing in both EOG Resources and EON 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 EON 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 EON Resources, you can compare the effects of market volatilities on EOG Resources and EON 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 EON Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of EOG Resources and EON Resources.
Diversification Opportunities for EOG Resources and EON Resources
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between EOG and EON is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding EOG Resources and EON Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EON Resources 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 EON Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EON Resources has no effect on the direction of EOG Resources i.e., EOG Resources and EON Resources go up and down completely randomly.
Pair Corralation between EOG Resources and EON Resources
Considering the 90-day investment horizon EOG Resources is expected to generate 0.28 times more return on investment than EON Resources. However, EOG Resources is 3.56 times less risky than EON Resources. It trades about 0.25 of its potential returns per unit of risk. EON Resources is currently generating about -0.23 per unit of risk. If you would invest 12,052 in EOG Resources on August 31, 2024 and sell it today you would earn a total of 1,274 from holding EOG Resources or generate 10.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
EOG Resources vs. EON Resources
Performance |
| Timeline |
| EOG Resources |
| EON Resources |
EOG Resources and EON Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EOG Resources and EON Resources
The main advantage of trading using opposite EOG Resources and EON Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EOG Resources position performs unexpectedly, EON 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 EON Resources will offset losses from the drop in EON Resources' long position.| EOG Resources vs. Permian Resources | EOG Resources vs. Devon Energy | EOG Resources vs. Coterra Energy | EOG Resources vs. Marathon Oil |
| EON Resources vs. BCB Bancorp | EON Resources vs. China Aircraft Leasing | EON Resources vs. Siriuspoint | EON Resources vs. Avis Budget Group |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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