Correlation Between Magnolia Oil and Veren
Can any of the company-specific risk be diversified away by investing in both Magnolia Oil and Veren 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 Magnolia Oil and Veren into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Magnolia Oil Gas and Veren Inc, you can compare the effects of market volatilities on Magnolia Oil and Veren 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 Magnolia Oil with a short position of Veren. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magnolia Oil and Veren.
Diversification Opportunities for Magnolia Oil and Veren
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Magnolia and Veren is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Magnolia Oil Gas and Veren Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Veren Inc and Magnolia Oil 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 Magnolia Oil Gas are associated (or correlated) with Veren. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Veren Inc has no effect on the direction of Magnolia Oil i.e., Magnolia Oil and Veren go up and down completely randomly.
Pair Corralation between Magnolia Oil and Veren
Considering the 90-day investment horizon Magnolia Oil Gas is expected to generate 0.54 times more return on investment than Veren. However, Magnolia Oil Gas is 1.84 times less risky than Veren. It trades about 0.24 of its potential returns per unit of risk. Veren Inc is currently generating about -0.14 per unit of risk. If you would invest 2,545 in Magnolia Oil Gas on August 28, 2024 and sell it today you would earn a total of 274.00 from holding Magnolia Oil Gas or generate 10.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Magnolia Oil Gas vs. Veren Inc
Performance |
| Timeline |
| Magnolia Oil Gas |
| Veren Inc |
Magnolia Oil and Veren Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magnolia Oil and Veren
The main advantage of trading using opposite Magnolia Oil and Veren positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magnolia Oil position performs unexpectedly, Veren 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 Veren will offset losses from the drop in Veren's long position.| Magnolia Oil vs. SM Energy Co | Magnolia Oil vs. Civitas Resources | Magnolia Oil vs. Range Resources Corp | Magnolia Oil vs. Matador Resources |
| Veren vs. ConocoPhillips | Veren vs. Occidental Petroleum | Veren vs. Permian Resources | Veren vs. EOG Resources |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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