Correlation Between Evolution Petroleum and Cross Timbers
Can any of the company-specific risk be diversified away by investing in both Evolution Petroleum and Cross Timbers 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 Evolution Petroleum and Cross Timbers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Evolution Petroleum and Cross Timbers Royalty, you can compare the effects of market volatilities on Evolution Petroleum and Cross Timbers 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 Evolution Petroleum with a short position of Cross Timbers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evolution Petroleum and Cross Timbers.
Diversification Opportunities for Evolution Petroleum and Cross Timbers
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Evolution and Cross is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Evolution Petroleum and Cross Timbers Royalty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cross Timbers Royalty and Evolution Petroleum 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 Evolution Petroleum are associated (or correlated) with Cross Timbers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cross Timbers Royalty has no effect on the direction of Evolution Petroleum i.e., Evolution Petroleum and Cross Timbers go up and down completely randomly.
Pair Corralation between Evolution Petroleum and Cross Timbers
Considering the 90-day investment horizon Evolution Petroleum is expected to generate 0.97 times more return on investment than Cross Timbers. However, Evolution Petroleum is 1.03 times less risky than Cross Timbers. It trades about 0.02 of its potential returns per unit of risk. Cross Timbers Royalty is currently generating about -0.07 per unit of risk. If you would invest 545.00 in Evolution Petroleum on September 4, 2024 and sell it today you would earn a total of 40.00 from holding Evolution Petroleum or generate 7.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Evolution Petroleum vs. Cross Timbers Royalty
Performance |
| Timeline |
| Evolution Petroleum |
| Cross Timbers Royalty |
Evolution Petroleum and Cross Timbers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evolution Petroleum and Cross Timbers
The main advantage of trading using opposite Evolution Petroleum and Cross Timbers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evolution Petroleum position performs unexpectedly, Cross Timbers 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 Cross Timbers will offset losses from the drop in Cross Timbers' long position.| Evolution Petroleum vs. GeoPark | Evolution Petroleum vs. Granite Ridge Resources | Evolution Petroleum vs. PHX Minerals | Evolution Petroleum vs. California Resources Corp |
| Cross Timbers vs. Evolution Petroleum | Cross Timbers vs. Ring Energy | Cross Timbers vs. Gran Tierra Energy | Cross Timbers vs. PEDEVCO Corp |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments |