Correlation Between PetroShale and Crescent Energy
Can any of the company-specific risk be diversified away by investing in both PetroShale and Crescent Energy 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 PetroShale and Crescent Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PetroShale and Crescent Energy Co, you can compare the effects of market volatilities on PetroShale and Crescent Energy 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 PetroShale with a short position of Crescent Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of PetroShale and Crescent Energy.
Diversification Opportunities for PetroShale and Crescent Energy
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between PetroShale and Crescent is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding PetroShale and Crescent Energy Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crescent Energy and PetroShale 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 PetroShale are associated (or correlated) with Crescent Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crescent Energy has no effect on the direction of PetroShale i.e., PetroShale and Crescent Energy go up and down completely randomly.
Pair Corralation between PetroShale and Crescent Energy
Assuming the 90 days horizon PetroShale is expected to under-perform the Crescent Energy. But the otc stock apears to be less risky and, when comparing its historical volatility, PetroShale is 1.1 times less risky than Crescent Energy. The otc stock trades about -0.15 of its potential returns per unit of risk. The Crescent Energy Co is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,211 in Crescent Energy Co on September 3, 2024 and sell it today you would earn a total of 272.00 from holding Crescent Energy Co or generate 22.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PetroShale vs. Crescent Energy Co
Performance |
| Timeline |
| PetroShale |
| Crescent Energy |
PetroShale and Crescent Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PetroShale and Crescent Energy
The main advantage of trading using opposite PetroShale and Crescent Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PetroShale position performs unexpectedly, Crescent Energy 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 Crescent Energy will offset losses from the drop in Crescent Energy's long position.| PetroShale vs. Dno ASA | PetroShale vs. Horizon Oil Limited | PetroShale vs. Enwell Energy plc | PetroShale vs. Tullow Oil plc |
| Crescent Energy vs. Vital Energy | Crescent Energy vs. Permian Resources | Crescent Energy vs. Magnolia Oil Gas | Crescent Energy vs. Ring Energy |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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