Correlation Between CNOOC and Canadian Natural
Can any of the company-specific risk be diversified away by investing in both CNOOC and Canadian Natural 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 CNOOC and Canadian Natural into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CNOOC and Canadian Natural Resources, you can compare the effects of market volatilities on CNOOC and Canadian Natural 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 CNOOC with a short position of Canadian Natural. Check out your portfolio center. Please also check ongoing floating volatility patterns of CNOOC and Canadian Natural.
Diversification Opportunities for CNOOC and Canadian Natural
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between CNOOC and Canadian is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding CNOOC and Canadian Natural Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canadian Natural Res and CNOOC 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 CNOOC are associated (or correlated) with Canadian Natural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canadian Natural Res has no effect on the direction of CNOOC i.e., CNOOC and Canadian Natural go up and down completely randomly.
Pair Corralation between CNOOC and Canadian Natural
Assuming the 90 days trading horizon CNOOC is expected to generate 3.17 times more return on investment than Canadian Natural. However, CNOOC is 3.17 times more volatile than Canadian Natural Resources. It trades about 0.11 of its potential returns per unit of risk. Canadian Natural Resources is currently generating about 0.04 per unit of risk. If you would invest 18.00 in CNOOC on September 26, 2024 and sell it today you would earn a total of 200.00 from holding CNOOC or generate 1111.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CNOOC vs. Canadian Natural Resources
Performance |
| Timeline |
| CNOOC |
| Canadian Natural Res |
CNOOC and Canadian Natural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CNOOC and Canadian Natural
The main advantage of trading using opposite CNOOC and Canadian Natural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CNOOC position performs unexpectedly, Canadian Natural 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 Canadian Natural will offset losses from the drop in Canadian Natural's long position.| CNOOC vs. Alibaba Group Holding | CNOOC vs. ConocoPhillips | CNOOC vs. Canadian Natural Resources | CNOOC vs. Occidental Petroleum |
| Canadian Natural vs. Alibaba Group Holding | Canadian Natural vs. ConocoPhillips | Canadian Natural vs. CNOOC | Canadian Natural vs. Occidental Petroleum |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |