Correlation Between Ring Energy and Calumet Specialty
Can any of the company-specific risk be diversified away by investing in both Ring Energy and Calumet Specialty 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 Ring Energy and Calumet Specialty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ring Energy and Calumet Specialty Products, you can compare the effects of market volatilities on Ring Energy and Calumet Specialty 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 Ring Energy with a short position of Calumet Specialty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ring Energy and Calumet Specialty.
Diversification Opportunities for Ring Energy and Calumet Specialty
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ring and Calumet is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Ring Energy and Calumet Specialty Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calumet Specialty and Ring Energy 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 Ring Energy are associated (or correlated) with Calumet Specialty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calumet Specialty has no effect on the direction of Ring Energy i.e., Ring Energy and Calumet Specialty go up and down completely randomly.
Pair Corralation between Ring Energy and Calumet Specialty
Considering the 90-day investment horizon Ring Energy is expected to generate 33.26 times less return on investment than Calumet Specialty. But when comparing it to its historical volatility, Ring Energy is 1.06 times less risky than Calumet Specialty. It trades about 0.0 of its potential returns per unit of risk. Calumet Specialty Products is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,633 in Calumet Specialty Products on September 14, 2024 and sell it today you would earn a total of 445.00 from holding Calumet Specialty Products or generate 27.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ring Energy vs. Calumet Specialty Products
Performance |
| Timeline |
| Ring Energy |
| Calumet Specialty |
Ring Energy and Calumet Specialty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ring Energy and Calumet Specialty
The main advantage of trading using opposite Ring Energy and Calumet Specialty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ring Energy position performs unexpectedly, Calumet Specialty 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 Calumet Specialty will offset losses from the drop in Calumet Specialty's long position.| Ring Energy vs. Vital Energy | Ring Energy vs. Permian Resources | Ring Energy vs. Magnolia Oil Gas | Ring Energy vs. SM Energy Co |
| Calumet Specialty vs. Battalion Oil Corp | Calumet Specialty vs. Granite Ridge Resources | Calumet Specialty vs. GeoPark | Calumet Specialty vs. Crescent Energy Co |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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