Correlation Between Kosmos Energy and Tellurian
Can any of the company-specific risk be diversified away by investing in both Kosmos Energy and Tellurian 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 Kosmos Energy and Tellurian into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kosmos Energy and Tellurian, you can compare the effects of market volatilities on Kosmos Energy and Tellurian 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 Kosmos Energy with a short position of Tellurian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kosmos Energy and Tellurian.
Diversification Opportunities for Kosmos Energy and Tellurian
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Kosmos and Tellurian is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Kosmos Energy and Tellurian in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tellurian and Kosmos 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 Kosmos Energy are associated (or correlated) with Tellurian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tellurian has no effect on the direction of Kosmos Energy i.e., Kosmos Energy and Tellurian go up and down completely randomly.
Pair Corralation between Kosmos Energy and Tellurian
Considering the 90-day investment horizon Kosmos Energy is expected to under-perform the Tellurian. But the stock apears to be less risky and, when comparing its historical volatility, Kosmos Energy is 2.47 times less risky than Tellurian. The stock trades about -0.01 of its potential returns per unit of risk. The Tellurian is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 214.00 in Tellurian on August 30, 2024 and sell it today you would lose (114.00) from holding Tellurian or give up 53.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 92.93% |
| Values | Daily Returns |
Kosmos Energy vs. Tellurian
Performance |
| Timeline |
| Kosmos Energy |
| Tellurian |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
Kosmos Energy and Tellurian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kosmos Energy and Tellurian
The main advantage of trading using opposite Kosmos Energy and Tellurian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kosmos Energy position performs unexpectedly, Tellurian 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 Tellurian will offset losses from the drop in Tellurian's long position.| Kosmos Energy vs. Matador Resources | Kosmos Energy vs. Murphy Oil | Kosmos Energy vs. Civitas Resources | Kosmos Energy vs. Magnolia Oil Gas |
| Tellurian vs. Epsilon Energy | Tellurian vs. GeoPark | Tellurian vs. Kosmos Energy | Tellurian 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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