Correlation Between Intel and Callon Petroleum
Can any of the company-specific risk be diversified away by investing in both Intel 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 Intel and Callon Petroleum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intel and Callon Petroleum, you can compare the effects of market volatilities on Intel 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 Intel with a short position of Callon Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intel and Callon Petroleum.
Diversification Opportunities for Intel and Callon Petroleum
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Intel and Callon is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Intel and Callon Petroleum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Callon Petroleum and Intel 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 Intel 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 Intel i.e., Intel and Callon Petroleum go up and down completely randomly.
Pair Corralation between Intel and Callon Petroleum
Given the investment horizon of 90 days Intel is expected to under-perform the Callon Petroleum. In addition to that, Intel is 1.35 times more volatile than Callon Petroleum. It trades about -0.02 of its total potential returns per unit of risk. Callon Petroleum is currently generating about 0.04 per unit of volatility. If you would invest 3,515 in Callon Petroleum on October 24, 2024 and sell it today you would earn a total of 38.00 from holding Callon Petroleum or generate 1.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 4.09% |
| Values | Daily Returns |
Intel vs. Callon Petroleum
Performance |
| Timeline |
| Intel |
| Callon Petroleum |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Intel and Callon Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intel and Callon Petroleum
The main advantage of trading using opposite Intel and Callon Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intel 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.The idea behind Intel and Callon Petroleum pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Callon Petroleum vs. SandRidge Energy | Callon Petroleum vs. Permian Resources | Callon Petroleum vs. Matador Resources | Callon Petroleum vs. Antero Resources 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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