Correlation Between EOG Resources and Hillcrest Energy
Can any of the company-specific risk be diversified away by investing in both EOG Resources and Hillcrest Energy 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 Hillcrest Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EOG Resources and Hillcrest Energy Technologies, you can compare the effects of market volatilities on EOG Resources and Hillcrest Energy 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 Hillcrest Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of EOG Resources and Hillcrest Energy.
Diversification Opportunities for EOG Resources and Hillcrest Energy
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between EOG and Hillcrest is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding EOG Resources and Hillcrest Energy Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hillcrest Energy Tec 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 Hillcrest Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hillcrest Energy Tec has no effect on the direction of EOG Resources i.e., EOG Resources and Hillcrest Energy go up and down completely randomly.
Pair Corralation between EOG Resources and Hillcrest Energy
Considering the 90-day investment horizon EOG Resources is expected to generate 0.35 times more return on investment than Hillcrest Energy. However, EOG Resources is 2.82 times less risky than Hillcrest Energy. It trades about 0.21 of its potential returns per unit of risk. Hillcrest Energy Technologies is currently generating about -0.09 per unit of risk. If you would invest 12,207 in EOG Resources on August 29, 2024 and sell it today you would earn a total of 1,047 from holding EOG Resources or generate 8.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
EOG Resources vs. Hillcrest Energy Technologies
Performance |
| Timeline |
| EOG Resources |
| Hillcrest Energy Tec |
EOG Resources and Hillcrest Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EOG Resources and Hillcrest Energy
The main advantage of trading using opposite EOG Resources and Hillcrest Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EOG Resources position performs unexpectedly, Hillcrest Energy 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 Hillcrest Energy will offset losses from the drop in Hillcrest Energy's long position.| EOG Resources vs. Permian Resources | EOG Resources vs. Devon Energy | EOG Resources vs. Coterra Energy | EOG Resources vs. Marathon Oil |
| Hillcrest Energy vs. Permian Resources | Hillcrest Energy vs. Devon Energy | Hillcrest Energy vs. EOG Resources | Hillcrest Energy 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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