Correlation Between Southwestern Energy and California Resources
Can any of the company-specific risk be diversified away by investing in both Southwestern Energy and California 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 Southwestern Energy and California Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Southwestern Energy and California Resources Corp, you can compare the effects of market volatilities on Southwestern Energy and California 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 Southwestern Energy with a short position of California Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Southwestern Energy and California Resources.
Diversification Opportunities for Southwestern Energy and California Resources
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Southwestern and California is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Southwestern Energy and California Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on California Resources Corp and Southwestern 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 Southwestern Energy are associated (or correlated) with California Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of California Resources Corp has no effect on the direction of Southwestern Energy i.e., Southwestern Energy and California Resources go up and down completely randomly.
Pair Corralation between Southwestern Energy and California Resources
If you would invest 5,240 in California Resources Corp on August 29, 2024 and sell it today you would earn a total of 616.00 from holding California Resources Corp or generate 11.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
Southwestern Energy vs. California Resources Corp
Performance |
| Timeline |
| Southwestern Energy |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
| California Resources Corp |
Southwestern Energy and California Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Southwestern Energy and California Resources
The main advantage of trading using opposite Southwestern Energy and California Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Southwestern Energy position performs unexpectedly, California 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 California Resources will offset losses from the drop in California Resources' long position.| Southwestern Energy vs. Antero Resources Corp | Southwestern Energy vs. EQT Corporation | Southwestern Energy vs. Matador Resources | Southwestern Energy vs. Range Resources Corp |
| California Resources vs. Berry Petroleum Corp | California Resources vs. Magnolia Oil Gas | California Resources vs. Comstock Resources | California Resources vs. Gulfport Energy Operating |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |