Correlation Between EOG Resources and United Amern
Can any of the company-specific risk be diversified away by investing in both EOG Resources and United Amern 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 United Amern into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EOG Resources and United Amern Pete, you can compare the effects of market volatilities on EOG Resources and United Amern 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 United Amern. Check out your portfolio center. Please also check ongoing floating volatility patterns of EOG Resources and United Amern.
Diversification Opportunities for EOG Resources and United Amern
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between EOG and United is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding EOG Resources and United Amern Pete in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Amern Pete 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 United Amern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Amern Pete has no effect on the direction of EOG Resources i.e., EOG Resources and United Amern go up and down completely randomly.
Pair Corralation between EOG Resources and United Amern
Considering the 90-day investment horizon EOG Resources is expected to generate 0.25 times more return on investment than United Amern. However, EOG Resources is 3.94 times less risky than United Amern. It trades about 0.25 of its potential returns per unit of risk. United Amern Pete is currently generating about -0.02 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 | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
EOG Resources vs. United Amern Pete
Performance |
| Timeline |
| EOG Resources |
| United Amern Pete |
EOG Resources and United Amern Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EOG Resources and United Amern
The main advantage of trading using opposite EOG Resources and United Amern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EOG Resources position performs unexpectedly, United Amern 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 United Amern will offset losses from the drop in United Amern's long position.| EOG Resources vs. Permian Resources | EOG Resources vs. Devon Energy | EOG Resources vs. Coterra Energy | EOG Resources vs. Marathon Oil |
| United Amern vs. Permian Resources | United Amern vs. Devon Energy | United Amern vs. EOG Resources | United Amern 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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