Correlation Between Matador Resources and Callon Petroleum
Can any of the company-specific risk be diversified away by investing in both Matador Resources 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 Matador Resources and Callon Petroleum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Matador Resources and Callon Petroleum, you can compare the effects of market volatilities on Matador Resources 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 Matador Resources with a short position of Callon Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Matador Resources and Callon Petroleum.
Diversification Opportunities for Matador Resources and Callon Petroleum
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Matador and Callon is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Matador Resources and Callon Petroleum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Callon Petroleum and Matador Resources 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 Matador Resources 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 Matador Resources i.e., Matador Resources and Callon Petroleum go up and down completely randomly.
Pair Corralation between Matador Resources and Callon Petroleum
If you would invest 5,808 in Matador Resources on November 3, 2024 and sell it today you would lose (8.00) from holding Matador Resources or give up 0.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Matador Resources vs. Callon Petroleum
Performance |
| Timeline |
| Matador Resources |
| Callon Petroleum |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Matador Resources and Callon Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Matador Resources and Callon Petroleum
The main advantage of trading using opposite Matador Resources and Callon Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Matador Resources 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.| Matador Resources vs. Murphy Oil | Matador Resources vs. Civitas Resources | Matador Resources vs. Permian Resources | Matador Resources vs. Antero Resources Corp |
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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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