Correlation Between Cabot Oil and Hess
Can any of the company-specific risk be diversified away by investing in both Cabot Oil 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 Cabot Oil and Hess into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cabot Oil Gas and Hess Corporation, you can compare the effects of market volatilities on Cabot Oil 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 Cabot Oil with a short position of Hess. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cabot Oil and Hess.
Diversification Opportunities for Cabot Oil and Hess
Pay attention - limited upside
The 3 months correlation between Cabot and Hess is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Cabot Oil Gas and Hess Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hess and Cabot 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 Cabot Oil Gas 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 Cabot Oil i.e., Cabot Oil and Hess go up and down completely randomly.
Pair Corralation between Cabot Oil and Hess
If you would invest 13,154 in Hess Corporation on January 19, 2024 and sell it today you would earn a total of 2,024 from holding Hess Corporation or generate 15.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Cabot Oil Gas vs. Hess Corp.
Performance |
| Timeline |
| Cabot Oil Gas |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Hess |
Cabot Oil and Hess Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cabot Oil and Hess
The main advantage of trading using opposite Cabot Oil and Hess positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cabot Oil 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.| Cabot Oil vs. Tandem Diabetes Care | Cabot Oil vs. Tyson Foods | Cabot Oil vs. Primoris Services | Cabot Oil vs. Cardinal Health |
| 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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