Correlation Between Hess and EOG Resources
Can any of the company-specific risk be diversified away by investing in both Hess and EOG Resources 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 Hess and EOG Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hess Corporation and EOG Resources, you can compare the effects of market volatilities on Hess and EOG Resources 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 Hess with a short position of EOG Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hess and EOG Resources.
Diversification Opportunities for Hess and EOG Resources
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Hess and EOG is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Hess Corp. and EOG Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EOG Resources and Hess 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 Hess Corporation are associated (or correlated) with EOG Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EOG Resources has no effect on the direction of Hess i.e., Hess and EOG Resources go up and down completely randomly.
Pair Corralation between Hess and EOG Resources
If you would invest 37,924 in Hess Corporation on October 14, 2024 and sell it today you would earn a total of 0.00 from holding Hess Corporation or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hess Corp. vs. EOG Resources
Performance |
| Timeline |
| Hess |
| EOG Resources |
Hess and EOG Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hess and EOG Resources
The main advantage of trading using opposite Hess and EOG Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hess position performs unexpectedly, EOG Resources 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 EOG Resources will offset losses from the drop in EOG Resources' long position.| Hess vs. Occidental Petroleum | Hess vs. Devon Energy | Hess vs. Diamondback Energy, | Hess vs. APA Corporation |
| EOG Resources vs. Occidental Petroleum | EOG Resources vs. Devon Energy | EOG Resources vs. Diamondback Energy, | EOG Resources vs. APA Corporation |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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