Correlation Between Occidental Petroleum and Battalion Oil
Can any of the company-specific risk be diversified away by investing in both Occidental Petroleum and Battalion Oil 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 Occidental Petroleum and Battalion Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Occidental Petroleum and Battalion Oil Corp, you can compare the effects of market volatilities on Occidental Petroleum and Battalion Oil 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 Occidental Petroleum with a short position of Battalion Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Occidental Petroleum and Battalion Oil.
Diversification Opportunities for Occidental Petroleum and Battalion Oil
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Occidental and Battalion is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Occidental Petroleum and Battalion Oil Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Battalion Oil Corp and Occidental Petroleum 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 Occidental Petroleum are associated (or correlated) with Battalion Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Battalion Oil Corp has no effect on the direction of Occidental Petroleum i.e., Occidental Petroleum and Battalion Oil go up and down completely randomly.
Pair Corralation between Occidental Petroleum and Battalion Oil
Considering the 90-day investment horizon Occidental Petroleum is expected to generate 0.37 times more return on investment than Battalion Oil. However, Occidental Petroleum is 2.69 times less risky than Battalion Oil. It trades about 0.03 of its potential returns per unit of risk. Battalion Oil Corp is currently generating about -0.22 per unit of risk. If you would invest 5,055 in Occidental Petroleum on November 22, 2024 and sell it today you would earn a total of 44.00 from holding Occidental Petroleum or generate 0.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Occidental Petroleum vs. Battalion Oil Corp
Performance |
| Timeline |
| Occidental Petroleum |
| Battalion Oil Corp |
Occidental Petroleum and Battalion Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Occidental Petroleum and Battalion Oil
The main advantage of trading using opposite Occidental Petroleum and Battalion Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Occidental Petroleum position performs unexpectedly, Battalion Oil 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 Battalion Oil will offset losses from the drop in Battalion Oil's long position.| Occidental Petroleum vs. Coterra Energy | Occidental Petroleum vs. Diamondback Energy | Occidental Petroleum vs. ConocoPhillips | Occidental Petroleum vs. EOG Resources |
| Battalion Oil vs. Epsilon Energy | Battalion Oil vs. Citizens Community Bancorp | Battalion Oil vs. Perma Pipe International Holdings | Battalion Oil vs. Amplify Energy 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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |