Correlation Between US Energy and Crescent Point
Can any of the company-specific risk be diversified away by investing in both US Energy and Crescent Point 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 US Energy and Crescent Point into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between US Energy Corp and Crescent Point Energy, you can compare the effects of market volatilities on US Energy and Crescent Point 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 US Energy with a short position of Crescent Point. Check out your portfolio center. Please also check ongoing floating volatility patterns of US Energy and Crescent Point.
Diversification Opportunities for US Energy and Crescent Point
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between USEG and Crescent is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding US Energy Corp and Crescent Point Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crescent Point Energy and US 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 US Energy Corp are associated (or correlated) with Crescent Point. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crescent Point Energy has no effect on the direction of US Energy i.e., US Energy and Crescent Point go up and down completely randomly.
Pair Corralation between US Energy and Crescent Point
Given the investment horizon of 90 days US Energy is expected to generate 1.2 times less return on investment than Crescent Point. In addition to that, US Energy is 1.72 times more volatile than Crescent Point Energy. It trades about 0.03 of its total potential returns per unit of risk. Crescent Point Energy is currently generating about 0.06 per unit of volatility. If you would invest 612.00 in Crescent Point Energy on September 12, 2024 and sell it today you would earn a total of 187.00 from holding Crescent Point Energy or generate 30.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 72.65% |
| Values | Daily Returns |
US Energy Corp vs. Crescent Point Energy
Performance |
| Timeline |
| US Energy Corp |
| Crescent Point Energy |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
US Energy and Crescent Point Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with US Energy and Crescent Point
The main advantage of trading using opposite US Energy and Crescent Point positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if US Energy position performs unexpectedly, Crescent Point 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 Point will offset losses from the drop in Crescent Point's long position.| US Energy vs. PEDEVCO Corp | US Energy vs. Houston American Energy | US Energy vs. PHX Minerals | US Energy vs. Trio Petroleum Corp |
| Crescent Point vs. Vermilion Energy | Crescent Point vs. Canadian Natural Resources | Crescent Point vs. Baytex Energy Corp | Crescent Point vs. Ovintiv |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |