Correlation Between ConocoPhillips and CNOOC
Can any of the company-specific risk be diversified away by investing in both ConocoPhillips and CNOOC 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 CNOOC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ConocoPhillips and CNOOC, you can compare the effects of market volatilities on ConocoPhillips and CNOOC 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 CNOOC. Check out your portfolio center. Please also check ongoing floating volatility patterns of ConocoPhillips and CNOOC.
Diversification Opportunities for ConocoPhillips and CNOOC
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between ConocoPhillips and CNOOC is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding ConocoPhillips and CNOOC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CNOOC 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 CNOOC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CNOOC has no effect on the direction of ConocoPhillips i.e., ConocoPhillips and CNOOC go up and down completely randomly.
Pair Corralation between ConocoPhillips and CNOOC
Assuming the 90 days horizon ConocoPhillips is expected to under-perform the CNOOC. In addition to that, ConocoPhillips is 14.09 times more volatile than CNOOC. It trades about -0.06 of its total potential returns per unit of risk. CNOOC is currently generating about -0.16 per unit of volatility. If you would invest 220.00 in CNOOC on September 25, 2024 and sell it today you would lose (2.00) from holding CNOOC or give up 0.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 97.62% |
| Values | Daily Returns |
ConocoPhillips vs. CNOOC
Performance |
| Timeline |
| ConocoPhillips |
| CNOOC |
ConocoPhillips and CNOOC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ConocoPhillips and CNOOC
The main advantage of trading using opposite ConocoPhillips and CNOOC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ConocoPhillips position performs unexpectedly, CNOOC 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 CNOOC will offset losses from the drop in CNOOC's long position.| ConocoPhillips vs. Alibaba Group Holding | ConocoPhillips vs. CNOOC | ConocoPhillips vs. EOG Resources | ConocoPhillips vs. Canadian Natural Resources |
| CNOOC vs. Alibaba Group Holding | CNOOC vs. ConocoPhillips | CNOOC vs. EOG Resources | CNOOC vs. Canadian Natural Resources |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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