Correlation Between Gran Tierra and Callon Petroleum
Can any of the company-specific risk be diversified away by investing in both Gran Tierra and Callon Petroleum 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 Gran Tierra and Callon Petroleum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gran Tierra Energy and Callon Petroleum, you can compare the effects of market volatilities on Gran Tierra and Callon Petroleum 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 Gran Tierra with a short position of Callon Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gran Tierra and Callon Petroleum.
Diversification Opportunities for Gran Tierra and Callon Petroleum
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Gran and Callon is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Gran Tierra Energy and Callon Petroleum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Callon Petroleum and Gran Tierra 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 Gran Tierra Energy are associated (or correlated) with Callon Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Callon Petroleum has no effect on the direction of Gran Tierra i.e., Gran Tierra and Callon Petroleum go up and down completely randomly.
Pair Corralation between Gran Tierra and Callon Petroleum
If you would invest 3,553 in Callon Petroleum on November 3, 2024 and sell it today you would earn a total of 0.00 from holding Callon Petroleum or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Gran Tierra Energy vs. Callon Petroleum
Performance |
| Timeline |
| Gran Tierra Energy |
| Callon Petroleum |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Gran Tierra and Callon Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gran Tierra and Callon Petroleum
The main advantage of trading using opposite Gran Tierra and Callon Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gran Tierra position performs unexpectedly, Callon Petroleum 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 Callon Petroleum will offset losses from the drop in Callon Petroleum's long position.| Gran Tierra vs. Permian Resources | Gran Tierra vs. PEDEVCO Corp | Gran Tierra vs. Vermilion Energy | Gran Tierra vs. Ovintiv |
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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