Correlation Between ConocoPhillips and Lundin Energy
Can any of the company-specific risk be diversified away by investing in both ConocoPhillips and Lundin Energy 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 ConocoPhillips and Lundin Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ConocoPhillips and Lundin Energy AB, you can compare the effects of market volatilities on ConocoPhillips and Lundin Energy 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 ConocoPhillips with a short position of Lundin Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of ConocoPhillips and Lundin Energy.
Diversification Opportunities for ConocoPhillips and Lundin Energy
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ConocoPhillips and Lundin is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding ConocoPhillips and Lundin Energy AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lundin Energy AB and ConocoPhillips 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 ConocoPhillips are associated (or correlated) with Lundin Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lundin Energy AB has no effect on the direction of ConocoPhillips i.e., ConocoPhillips and Lundin Energy go up and down completely randomly.
Pair Corralation between ConocoPhillips and Lundin Energy
Assuming the 90 days horizon ConocoPhillips is expected to generate 1.03 times more return on investment than Lundin Energy. However, ConocoPhillips is 1.03 times more volatile than Lundin Energy AB. It trades about 0.2 of its potential returns per unit of risk. Lundin Energy AB is currently generating about -0.12 per unit of risk. If you would invest 9,392 in ConocoPhillips on August 31, 2024 and sell it today you would earn a total of 962.00 from holding ConocoPhillips or generate 10.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
ConocoPhillips vs. Lundin Energy AB
Performance |
| Timeline |
| ConocoPhillips |
| Lundin Energy AB |
ConocoPhillips and Lundin Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ConocoPhillips and Lundin Energy
The main advantage of trading using opposite ConocoPhillips and Lundin Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ConocoPhillips position performs unexpectedly, Lundin Energy 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 Lundin Energy will offset losses from the drop in Lundin Energy's long position.| ConocoPhillips vs. Lion One Metals | ConocoPhillips vs. BE Semiconductor Industries | ConocoPhillips vs. Aluminum of | ConocoPhillips vs. ON SEMICONDUCTOR |
| Lundin Energy vs. GRUPO CARSO A1 | Lundin Energy vs. TOREX SEMICONDUCTOR LTD | Lundin Energy vs. MagnaChip Semiconductor Corp | Lundin Energy vs. INTER CARS SA |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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