Correlation Between Occidental Petroleum and CPG Old
Can any of the company-specific risk be diversified away by investing in both Occidental Petroleum and CPG Old 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 CPG Old into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Occidental Petroleum and CPG Old, you can compare the effects of market volatilities on Occidental Petroleum and CPG Old 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 CPG Old. Check out your portfolio center. Please also check ongoing floating volatility patterns of Occidental Petroleum and CPG Old.
Diversification Opportunities for Occidental Petroleum and CPG Old
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Occidental and CPG is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Occidental Petroleum and CPG Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CPG Old 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 CPG Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CPG Old has no effect on the direction of Occidental Petroleum i.e., Occidental Petroleum and CPG Old go up and down completely randomly.
Pair Corralation between Occidental Petroleum and CPG Old
If you would invest 799.00 in CPG Old on November 2, 2024 and sell it today you would earn a total of 0.00 from holding CPG Old or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 5.26% |
| Values | Daily Returns |
Occidental Petroleum vs. CPG Old
Performance |
| Timeline |
| Occidental Petroleum |
| CPG Old |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Occidental Petroleum and CPG Old Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Occidental Petroleum and CPG Old
The main advantage of trading using opposite Occidental Petroleum and CPG Old positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Occidental Petroleum position performs unexpectedly, CPG Old 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 CPG Old will offset losses from the drop in CPG Old's long position.| Occidental Petroleum vs. Coterra Energy | Occidental Petroleum vs. Diamondback Energy | Occidental Petroleum vs. ConocoPhillips | Occidental Petroleum vs. EOG Resources |
| CPG Old vs. Vermilion Energy | CPG Old vs. Canadian Natural Resources | CPG Old vs. Baytex Energy Corp | CPG Old vs. Ovintiv |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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