Correlation Between Vermilion Energy and Callon Petroleum
Can any of the company-specific risk be diversified away by investing in both Vermilion Energy and Callon Petroleum 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 Vermilion Energy and Callon Petroleum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vermilion Energy and Callon Petroleum, you can compare the effects of market volatilities on Vermilion Energy and Callon Petroleum 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 Vermilion Energy with a short position of Callon Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vermilion Energy and Callon Petroleum.
Diversification Opportunities for Vermilion Energy and Callon Petroleum
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Vermilion and Callon is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Vermilion Energy and Callon Petroleum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Callon Petroleum and Vermilion 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 Vermilion Energy are associated (or correlated) with Callon Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Callon Petroleum has no effect on the direction of Vermilion Energy i.e., Vermilion Energy and Callon Petroleum go up and down completely randomly.
Pair Corralation between Vermilion Energy and Callon Petroleum
If you would invest (100.00) in Callon Petroleum on November 9, 2024 and sell it today you would earn a total of 100.00 from holding Callon Petroleum or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Vermilion Energy vs. Callon Petroleum
Performance |
| Timeline |
| Vermilion Energy |
| Callon Petroleum |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Vermilion Energy and Callon Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vermilion Energy and Callon Petroleum
The main advantage of trading using opposite Vermilion Energy and Callon Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vermilion Energy position performs unexpectedly, Callon Petroleum 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 Callon Petroleum will offset losses from the drop in Callon Petroleum's long position.| Vermilion Energy vs. Baytex Energy Corp | Vermilion Energy vs. Obsidian Energy | Vermilion Energy vs. Canadian Natural Resources | Vermilion Energy vs. Ovintiv |
| Callon Petroleum vs. SandRidge Energy | Callon Petroleum vs. Permian Resources | Callon Petroleum vs. Matador Resources | Callon Petroleum vs. Antero Resources Corp |
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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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