Correlation Between Earthstone Energy and CPG Old
Can any of the company-specific risk be diversified away by investing in both Earthstone Energy and CPG Old 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 Earthstone Energy and CPG Old into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Earthstone Energy and CPG Old, you can compare the effects of market volatilities on Earthstone Energy and CPG Old 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 Earthstone Energy with a short position of CPG Old. Check out your portfolio center. Please also check ongoing floating volatility patterns of Earthstone Energy and CPG Old.
Diversification Opportunities for Earthstone Energy and CPG Old
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Earthstone and CPG is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Earthstone Energy and CPG Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CPG Old and Earthstone Energy 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 Earthstone Energy are associated (or correlated) with CPG Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CPG Old has no effect on the direction of Earthstone Energy i.e., Earthstone Energy and CPG Old go up and down completely randomly.
Pair Corralation between Earthstone Energy and CPG Old
If you would invest (100.00) in CPG Old on November 9, 2024 and sell it today you would earn a total of 100.00 from holding CPG Old or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Earthstone Energy vs. CPG Old
Performance |
| Timeline |
| Earthstone Energy |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
| CPG Old |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Earthstone Energy and CPG Old Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Earthstone Energy and CPG Old
The main advantage of trading using opposite Earthstone Energy and CPG Old positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Earthstone Energy position performs unexpectedly, CPG Old 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 CPG Old will offset losses from the drop in CPG Old's long position.| Earthstone Energy vs. Vital Energy | Earthstone Energy vs. Comstock Resources | Earthstone Energy vs. Magnolia Oil Gas | Earthstone Energy vs. Obsidian Energy |
| CPG Old vs. Vermilion Energy | CPG Old vs. Canadian Natural Resources | CPG Old vs. Baytex Energy Corp | CPG Old vs. Ovintiv |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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