Correlation Between Murphy Oil and ConocoPhillips
Can any of the company-specific risk be diversified away by investing in both Murphy Oil and ConocoPhillips 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 Murphy Oil and ConocoPhillips into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Murphy Oil and ConocoPhillips, you can compare the effects of market volatilities on Murphy Oil and ConocoPhillips 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 Murphy Oil with a short position of ConocoPhillips. Check out your portfolio center. Please also check ongoing floating volatility patterns of Murphy Oil and ConocoPhillips.
Diversification Opportunities for Murphy Oil and ConocoPhillips
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Murphy and ConocoPhillips is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Murphy Oil and ConocoPhillips in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ConocoPhillips and Murphy 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 Murphy Oil are associated (or correlated) with ConocoPhillips. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ConocoPhillips has no effect on the direction of Murphy Oil i.e., Murphy Oil and ConocoPhillips go up and down completely randomly.
Pair Corralation between Murphy Oil and ConocoPhillips
Considering the 90-day investment horizon Murphy Oil is expected to under-perform the ConocoPhillips. In addition to that, Murphy Oil is 1.19 times more volatile than ConocoPhillips. It trades about -0.08 of its total potential returns per unit of risk. ConocoPhillips is currently generating about -0.01 per unit of volatility. If you would invest 11,227 in ConocoPhillips on August 30, 2024 and sell it today you would lose (488.00) from holding ConocoPhillips or give up 4.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Murphy Oil vs. ConocoPhillips
Performance |
| Timeline |
| Murphy Oil |
| ConocoPhillips |
Murphy Oil and ConocoPhillips Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Murphy Oil and ConocoPhillips
The main advantage of trading using opposite Murphy Oil and ConocoPhillips positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Murphy Oil position performs unexpectedly, ConocoPhillips 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 ConocoPhillips will offset losses from the drop in ConocoPhillips' long position.| Murphy Oil vs. Matador Resources | Murphy Oil vs. Civitas Resources | Murphy Oil vs. Magnolia Oil Gas | Murphy Oil vs. SM Energy Co |
| ConocoPhillips vs. Diamondback Energy | ConocoPhillips vs. APA Corporation | ConocoPhillips vs. Hess Corporation | ConocoPhillips vs. Coterra Energy |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
Other Complementary Tools
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum |