Correlation Between Occidental Petroleum and Ovintiv
Can any of the company-specific risk be diversified away by investing in both Occidental Petroleum and Ovintiv 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 Ovintiv into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Occidental Petroleum and Ovintiv, you can compare the effects of market volatilities on Occidental Petroleum and Ovintiv 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 Ovintiv. Check out your portfolio center. Please also check ongoing floating volatility patterns of Occidental Petroleum and Ovintiv.
Diversification Opportunities for Occidental Petroleum and Ovintiv
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Occidental and Ovintiv is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Occidental Petroleum and Ovintiv in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ovintiv 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 Ovintiv. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ovintiv has no effect on the direction of Occidental Petroleum i.e., Occidental Petroleum and Ovintiv go up and down completely randomly.
Pair Corralation between Occidental Petroleum and Ovintiv
Considering the 90-day investment horizon Occidental Petroleum is expected to under-perform the Ovintiv. But the stock apears to be less risky and, when comparing its historical volatility, Occidental Petroleum is 1.4 times less risky than Ovintiv. The stock trades about -0.06 of its potential returns per unit of risk. The Ovintiv is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 4,327 in Ovintiv on September 14, 2024 and sell it today you would lose (259.00) from holding Ovintiv or give up 5.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Occidental Petroleum vs. Ovintiv
Performance |
| Timeline |
| Occidental Petroleum |
| Ovintiv |
Occidental Petroleum and Ovintiv Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Occidental Petroleum and Ovintiv
The main advantage of trading using opposite Occidental Petroleum and Ovintiv positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Occidental Petroleum position performs unexpectedly, Ovintiv 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 Ovintiv will offset losses from the drop in Ovintiv's long position.| Occidental Petroleum vs. Coterra Energy | Occidental Petroleum vs. Diamondback Energy | Occidental Petroleum vs. ConocoPhillips | Occidental Petroleum vs. EOG Resources |
| Ovintiv vs. Evolution Petroleum | Ovintiv vs. Ring Energy | Ovintiv vs. Gran Tierra Energy | Ovintiv vs. Permian Resources |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data |