Correlation Between Occidental Petroleum and Callon Petroleum
Can any of the company-specific risk be diversified away by investing in both Occidental Petroleum 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 Occidental Petroleum and Callon Petroleum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Occidental Petroleum and Callon Petroleum, you can compare the effects of market volatilities on Occidental Petroleum 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 Occidental Petroleum with a short position of Callon Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Occidental Petroleum and Callon Petroleum.
Diversification Opportunities for Occidental Petroleum and Callon Petroleum
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Occidental and Callon is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Occidental Petroleum and Callon Petroleum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Callon Petroleum 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 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 Occidental Petroleum i.e., Occidental Petroleum and Callon Petroleum go up and down completely randomly.
Pair Corralation between Occidental Petroleum and Callon Petroleum
If you would invest 5,132 in Occidental Petroleum on August 24, 2024 and sell it today you would earn a total of 22.00 from holding Occidental Petroleum or generate 0.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.35% |
| Values | Daily Returns |
Occidental Petroleum vs. Callon Petroleum
Performance |
| Timeline |
| Occidental Petroleum |
| Callon Petroleum |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Occidental Petroleum and Callon Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Occidental Petroleum and Callon Petroleum
The main advantage of trading using opposite Occidental Petroleum and Callon Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Occidental Petroleum 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.| Occidental Petroleum vs. Coterra Energy | Occidental Petroleum vs. Diamondback Energy | Occidental Petroleum vs. ConocoPhillips | Occidental Petroleum vs. EOG Resources |
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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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