Correlation Between Canadian Natural and Hess
Can any of the company-specific risk be diversified away by investing in both Canadian Natural and Hess 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 Canadian Natural and Hess into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canadian Natural Resources and Hess Corporation, you can compare the effects of market volatilities on Canadian Natural and Hess 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 Canadian Natural with a short position of Hess. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canadian Natural and Hess.
Diversification Opportunities for Canadian Natural and Hess
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Canadian and Hess is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Canadian Natural Resources and Hess Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hess and Canadian Natural 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 Canadian Natural Resources are associated (or correlated) with Hess. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hess has no effect on the direction of Canadian Natural i.e., Canadian Natural and Hess go up and down completely randomly.
Pair Corralation between Canadian Natural and Hess
Considering the 90-day investment horizon Canadian Natural Resources is expected to generate 1.24 times more return on investment than Hess. However, Canadian Natural is 1.24 times more volatile than Hess Corporation. It trades about 0.14 of its potential returns per unit of risk. Hess Corporation is currently generating about 0.08 per unit of risk. If you would invest 7,379 in Canadian Natural Resources on January 20, 2024 and sell it today you would earn a total of 276.00 from holding Canadian Natural Resources or generate 3.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canadian Natural Resources vs. Hess Corp.
Performance |
| Timeline |
| Canadian Natural Res |
| Hess |
Canadian Natural and Hess Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canadian Natural and Hess
The main advantage of trading using opposite Canadian Natural and Hess positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canadian Natural position performs unexpectedly, Hess 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 Hess will offset losses from the drop in Hess' long position.| Canadian Natural vs. Baytex Energy Corp | Canadian Natural vs. Vermilion Energy | Canadian Natural vs. Obsidian Energy | Canadian Natural vs. Ovintiv |
| Hess vs. Diamondback Energy | Hess vs. ConocoPhillips | Hess vs. Pioneer Natural Resources | Hess vs. APA Corporation |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Complementary Tools
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Positions Ratings 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 | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities |