Correlation Between 3M and Condor Petroleum
Can any of the company-specific risk be diversified away by investing in both 3M and Condor 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 3M and Condor Petroleum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 3M Company and Condor Petroleum, you can compare the effects of market volatilities on 3M and Condor 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 3M with a short position of Condor Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of 3M and Condor Petroleum.
Diversification Opportunities for 3M and Condor Petroleum
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between 3M and Condor is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding 3M Company and Condor Petroleum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Condor Petroleum and 3M 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 3M Company are associated (or correlated) with Condor Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Condor Petroleum has no effect on the direction of 3M i.e., 3M and Condor Petroleum go up and down completely randomly.
Pair Corralation between 3M and Condor Petroleum
Considering the 90-day investment horizon 3M is expected to generate 1.7 times less return on investment than Condor Petroleum. But when comparing it to its historical volatility, 3M Company is 3.27 times less risky than Condor Petroleum. It trades about 0.14 of its potential returns per unit of risk. Condor Petroleum is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 127.00 in Condor Petroleum on November 22, 2024 and sell it today you would earn a total of 5.00 from holding Condor Petroleum or generate 3.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
3M Company vs. Condor Petroleum
Performance |
| Timeline |
| 3M Company |
| Condor Petroleum |
3M and Condor Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 3M and Condor Petroleum
The main advantage of trading using opposite 3M and Condor Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 3M position performs unexpectedly, Condor 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 Condor Petroleum will offset losses from the drop in Condor Petroleum's long position.| 3M vs. MDU Resources Group | 3M vs. Valmont Industries | 3M vs. Griffon | 3M vs. Compass Diversified Holdings |
| Condor Petroleum vs. Canacol Energy | Condor Petroleum vs. InPlay Oil Corp | Condor Petroleum vs. Cardinal Energy | Condor Petroleum vs. Freehold Royalties |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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