Correlation Between Vital Energy and Callon Petroleum
Can any of the company-specific risk be diversified away by investing in both Vital 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 Vital 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 Vital Energy and Callon Petroleum, you can compare the effects of market volatilities on Vital 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 Vital Energy with a short position of Callon Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vital Energy and Callon Petroleum.
Diversification Opportunities for Vital Energy and Callon Petroleum
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Vital and Callon is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Vital Energy and Callon Petroleum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Callon Petroleum and Vital 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 Vital 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 Vital Energy i.e., Vital Energy and Callon Petroleum go up and down completely randomly.
Pair Corralation between Vital Energy and Callon Petroleum
If you would invest 2,671 in Vital Energy on August 28, 2024 and sell it today you would earn a total of 567.00 from holding Vital Energy or generate 21.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Vital Energy vs. Callon Petroleum
Performance |
| Timeline |
| Vital Energy |
| Callon Petroleum |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Vital Energy and Callon Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vital Energy and Callon Petroleum
The main advantage of trading using opposite Vital Energy and Callon Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vital 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.| Vital Energy vs. SM Energy Co | Vital Energy vs. Permian Resources | Vital Energy vs. Matador Resources | Vital Energy vs. Obsidian Energy |
| 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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