Correlation Between LandBridge Company and Obsidian Energy
Can any of the company-specific risk be diversified away by investing in both LandBridge Company and Obsidian Energy 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 LandBridge Company and Obsidian Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LandBridge Company LLC and Obsidian Energy, you can compare the effects of market volatilities on LandBridge Company and Obsidian Energy 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 LandBridge Company with a short position of Obsidian Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of LandBridge Company and Obsidian Energy.
Diversification Opportunities for LandBridge Company and Obsidian Energy
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between LandBridge and Obsidian is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding LandBridge Company LLC and Obsidian Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Obsidian Energy and LandBridge Company 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 LandBridge Company LLC are associated (or correlated) with Obsidian Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Obsidian Energy has no effect on the direction of LandBridge Company i.e., LandBridge Company and Obsidian Energy go up and down completely randomly.
Pair Corralation between LandBridge Company and Obsidian Energy
Allowing for the 90-day total investment horizon LandBridge Company LLC is expected to generate 2.03 times more return on investment than Obsidian Energy. However, LandBridge Company is 2.03 times more volatile than Obsidian Energy. It trades about 0.32 of its potential returns per unit of risk. Obsidian Energy is currently generating about 0.05 per unit of risk. If you would invest 5,384 in LandBridge Company LLC on August 30, 2024 and sell it today you would earn a total of 2,528 from holding LandBridge Company LLC or generate 46.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
LandBridge Company LLC vs. Obsidian Energy
Performance |
| Timeline |
| LandBridge Company |
| Obsidian Energy |
LandBridge Company and Obsidian Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LandBridge Company and Obsidian Energy
The main advantage of trading using opposite LandBridge Company and Obsidian Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LandBridge Company position performs unexpectedly, Obsidian Energy 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 Obsidian Energy will offset losses from the drop in Obsidian Energy's long position.| LandBridge Company vs. ANTA Sports Products | LandBridge Company vs. Academy Sports Outdoors | LandBridge Company vs. WiMi Hologram Cloud | LandBridge Company vs. Weibo Corp |
| Obsidian Energy vs. Devon Energy | Obsidian Energy vs. ConocoPhillips | Obsidian Energy vs. Diamondback Energy | Obsidian Energy vs. Occidental Petroleum |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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