Correlation Between Pancontinental Oil and Civitas Resources
Can any of the company-specific risk be diversified away by investing in both Pancontinental Oil and Civitas Resources 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 Pancontinental Oil and Civitas Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pancontinental Oil Gas and Civitas Resources, you can compare the effects of market volatilities on Pancontinental Oil and Civitas Resources 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 Pancontinental Oil with a short position of Civitas Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pancontinental Oil and Civitas Resources.
Diversification Opportunities for Pancontinental Oil and Civitas Resources
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Pancontinental and Civitas is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Pancontinental Oil Gas and Civitas Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Civitas Resources and Pancontinental Oil 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 Pancontinental Oil Gas are associated (or correlated) with Civitas Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Civitas Resources has no effect on the direction of Pancontinental Oil i.e., Pancontinental Oil and Civitas Resources go up and down completely randomly.
Pair Corralation between Pancontinental Oil and Civitas Resources
Assuming the 90 days horizon Pancontinental Oil is expected to generate 4.65 times less return on investment than Civitas Resources. But when comparing it to its historical volatility, Pancontinental Oil Gas is 3.18 times less risky than Civitas Resources. It trades about 0.04 of its potential returns per unit of risk. Civitas Resources is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 103.00 in Civitas Resources on November 3, 2024 and sell it today you would lose (100.90) from holding Civitas Resources or give up 97.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.2% |
| Values | Daily Returns |
Pancontinental Oil Gas vs. Civitas Resources
Performance |
| Timeline |
| Pancontinental Oil Gas |
| Civitas Resources |
Pancontinental Oil and Civitas Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pancontinental Oil and Civitas Resources
The main advantage of trading using opposite Pancontinental Oil and Civitas Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pancontinental Oil position performs unexpectedly, Civitas Resources 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 Civitas Resources will offset losses from the drop in Civitas Resources' long position.| Pancontinental Oil vs. Cheetah Mobile | Pancontinental Oil vs. TrueCar | Pancontinental Oil vs. Prosus NV ADR | Pancontinental Oil vs. MediaAlpha |
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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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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