Correlation Between EOG Resources and Energy Revenue
Can any of the company-specific risk be diversified away by investing in both EOG Resources and Energy Revenue 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 Energy Revenue into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EOG Resources and Energy Revenue Amer, you can compare the effects of market volatilities on EOG Resources and Energy Revenue 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 Energy Revenue. Check out your portfolio center. Please also check ongoing floating volatility patterns of EOG Resources and Energy Revenue.
Diversification Opportunities for EOG Resources and Energy Revenue
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between EOG and Energy is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding EOG Resources and Energy Revenue Amer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Energy Revenue Amer 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 Energy Revenue. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Energy Revenue Amer has no effect on the direction of EOG Resources i.e., EOG Resources and Energy Revenue go up and down completely randomly.
Pair Corralation between EOG Resources and Energy Revenue
Considering the 90-day investment horizon EOG Resources is expected to generate 0.1 times more return on investment than Energy Revenue. However, EOG Resources is 10.27 times less risky than Energy Revenue. It trades about 0.23 of its potential returns per unit of risk. Energy Revenue Amer is currently generating about -0.07 per unit of risk. If you would invest 12,196 in EOG Resources on September 1, 2024 and sell it today you would earn a total of 1,130 from holding EOG Resources or generate 9.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
EOG Resources vs. Energy Revenue Amer
Performance |
| Timeline |
| EOG Resources |
| Energy Revenue Amer |
EOG Resources and Energy Revenue Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EOG Resources and Energy Revenue
The main advantage of trading using opposite EOG Resources and Energy Revenue positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EOG Resources position performs unexpectedly, Energy Revenue 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 Energy Revenue will offset losses from the drop in Energy Revenue's long position.| EOG Resources vs. Epsilon Energy | EOG Resources vs. Crescent Energy Co | EOG Resources vs. Evolution Petroleum | EOG Resources vs. XXL Energy Corp |
| Energy Revenue vs. Permian Resources | Energy Revenue vs. Devon Energy | Energy Revenue vs. EOG Resources | Energy Revenue 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 CEOs Directory module to screen CEOs from public companies around the world.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world |