Correlation Between Obsidian Energy and ConocoPhillips
Can any of the company-specific risk be diversified away by investing in both Obsidian Energy 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 Obsidian Energy and ConocoPhillips into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Obsidian Energy and ConocoPhillips, you can compare the effects of market volatilities on Obsidian Energy 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 Obsidian Energy with a short position of ConocoPhillips. Check out your portfolio center. Please also check ongoing floating volatility patterns of Obsidian Energy and ConocoPhillips.
Diversification Opportunities for Obsidian Energy and ConocoPhillips
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Obsidian and ConocoPhillips is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Obsidian Energy and ConocoPhillips in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ConocoPhillips and Obsidian Energy 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 Obsidian Energy 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 Obsidian Energy i.e., Obsidian Energy and ConocoPhillips go up and down completely randomly.
Pair Corralation between Obsidian Energy and ConocoPhillips
Considering the 90-day investment horizon Obsidian Energy is expected to generate 1.76 times less return on investment than ConocoPhillips. In addition to that, Obsidian Energy is 1.66 times more volatile than ConocoPhillips. It trades about 0.0 of its total potential returns per unit of risk. ConocoPhillips is currently generating about 0.01 per unit of volatility. If you would invest 10,258 in ConocoPhillips on August 30, 2024 and sell it today you would earn a total of 481.00 from holding ConocoPhillips or generate 4.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Obsidian Energy vs. ConocoPhillips
Performance |
| Timeline |
| Obsidian Energy |
| ConocoPhillips |
Obsidian Energy and ConocoPhillips Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Obsidian Energy and ConocoPhillips
The main advantage of trading using opposite Obsidian Energy and ConocoPhillips positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Obsidian Energy 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.| Obsidian Energy vs. Devon Energy | Obsidian Energy vs. ConocoPhillips | Obsidian Energy vs. Diamondback Energy | Obsidian Energy vs. Occidental Petroleum |
| 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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