Correlation Between Vista Oil and Murphy Oil
Can any of the company-specific risk be diversified away by investing in both Vista Oil and Murphy Oil 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 Vista Oil and Murphy Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vista Oil Gas and Murphy Oil, you can compare the effects of market volatilities on Vista Oil and Murphy Oil 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 Vista Oil with a short position of Murphy Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vista Oil and Murphy Oil.
Diversification Opportunities for Vista Oil and Murphy Oil
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Vista and Murphy is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Vista Oil Gas and Murphy Oil in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Murphy Oil and Vista Oil 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 Vista Oil Gas are associated (or correlated) with Murphy Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Murphy Oil has no effect on the direction of Vista Oil i.e., Vista Oil and Murphy Oil go up and down completely randomly.
Pair Corralation between Vista Oil and Murphy Oil
Given the investment horizon of 90 days Vista Oil Gas is expected to generate 1.71 times more return on investment than Murphy Oil. However, Vista Oil is 1.71 times more volatile than Murphy Oil. It trades about 0.33 of its potential returns per unit of risk. Murphy Oil is currently generating about -0.14 per unit of risk. If you would invest 4,767 in Vista Oil Gas on September 13, 2024 and sell it today you would earn a total of 1,127 from holding Vista Oil Gas or generate 23.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Vista Oil Gas vs. Murphy Oil
Performance |
| Timeline |
| Vista Oil Gas |
| Murphy Oil |
Vista Oil and Murphy Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vista Oil and Murphy Oil
The main advantage of trading using opposite Vista Oil and Murphy Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vista Oil position performs unexpectedly, Murphy Oil 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 Murphy Oil will offset losses from the drop in Murphy Oil's long position.| Vista Oil vs. Battalion Oil Corp | Vista Oil vs. Evolution Petroleum | Vista Oil vs. GeoPark | Vista Oil vs. Antero Resources Corp |
| Murphy Oil vs. Matador Resources | Murphy Oil vs. Civitas Resources | Murphy Oil vs. Magnolia Oil Gas | Murphy Oil vs. SM 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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