Correlation Between Occidental Petroleum and Hess
Can any of the company-specific risk be diversified away by investing in both Occidental Petroleum and Hess 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 Hess into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Occidental Petroleum and Hess Corporation, you can compare the effects of market volatilities on Occidental Petroleum and Hess 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 Hess. Check out your portfolio center. Please also check ongoing floating volatility patterns of Occidental Petroleum and Hess.
Diversification Opportunities for Occidental Petroleum and Hess
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Occidental and Hess is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Occidental Petroleum and Hess Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hess 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 Hess. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hess has no effect on the direction of Occidental Petroleum i.e., Occidental Petroleum and Hess go up and down completely randomly.
Pair Corralation between Occidental Petroleum and Hess
If you would invest 4,790 in Occidental Petroleum on October 14, 2024 and sell it today you would earn a total of 440.00 from holding Occidental Petroleum or generate 9.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Occidental Petroleum vs. Hess Corp.
Performance |
| Timeline |
| Occidental Petroleum |
| Hess |
Occidental Petroleum and Hess Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Occidental Petroleum and Hess
The main advantage of trading using opposite Occidental Petroleum and Hess positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Occidental Petroleum position performs unexpectedly, Hess 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 Hess will offset losses from the drop in Hess' long position.| Occidental Petroleum vs. Metalurgica Gerdau SA | Occidental Petroleum vs. Warner Music Group | Occidental Petroleum vs. Metalrgica Riosulense SA | Occidental Petroleum vs. Nordon Indstrias Metalrgicas |
| Hess vs. Occidental Petroleum | Hess vs. Devon Energy | Hess vs. Diamondback Energy, | Hess vs. APA Corporation |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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