Correlation Between Murphy Oil and Callon Petroleum
Can any of the company-specific risk be diversified away by investing in both Murphy Oil 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 Murphy Oil and Callon Petroleum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Murphy Oil and Callon Petroleum, you can compare the effects of market volatilities on Murphy Oil 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 Murphy Oil with a short position of Callon Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Murphy Oil and Callon Petroleum.
Diversification Opportunities for Murphy Oil and Callon Petroleum
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Murphy and Callon is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Murphy Oil and Callon Petroleum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Callon Petroleum 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 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 Murphy Oil i.e., Murphy Oil and Callon Petroleum go up and down completely randomly.
Pair Corralation between Murphy Oil and Callon Petroleum
If you would invest 3,116 in Murphy Oil on August 31, 2024 and sell it today you would earn a total of 137.00 from holding Murphy Oil or generate 4.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
Murphy Oil vs. Callon Petroleum
Performance |
| Timeline |
| Murphy Oil |
| Callon Petroleum |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Murphy Oil and Callon Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Murphy Oil and Callon Petroleum
The main advantage of trading using opposite Murphy Oil and Callon Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Murphy Oil 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.| Murphy Oil vs. Matador Resources | Murphy Oil vs. Civitas Resources | Murphy Oil vs. Magnolia Oil Gas | Murphy Oil vs. SM Energy Co |
| Callon Petroleum vs. SandRidge Energy | Callon Petroleum vs. Permian Resources | Callon Petroleum vs. Matador Resources | Callon Petroleum vs. Antero Resources Corp |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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