Correlation Between Crescent Point and Ishares Sp
Can any of the company-specific risk be diversified away by investing in both Crescent Point and Ishares Sp 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 Crescent Point and Ishares Sp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Crescent Point Energy and Ishares Sp 500, you can compare the effects of market volatilities on Crescent Point and Ishares Sp 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 Crescent Point with a short position of Ishares Sp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crescent Point and Ishares Sp.
Diversification Opportunities for Crescent Point and Ishares Sp
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Crescent and Ishares is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Crescent Point Energy and Ishares Sp 500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ishares Sp 500 and Crescent Point 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 Crescent Point Energy are associated (or correlated) with Ishares Sp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ishares Sp 500 has no effect on the direction of Crescent Point i.e., Crescent Point and Ishares Sp go up and down completely randomly.
Pair Corralation between Crescent Point and Ishares Sp
Assuming the 90 days trading horizon Crescent Point Energy is expected to generate 2.32 times more return on investment than Ishares Sp. However, Crescent Point is 2.32 times more volatile than Ishares Sp 500. It trades about 0.07 of its potential returns per unit of risk. Ishares Sp 500 is currently generating about 0.09 per unit of risk. If you would invest 708.00 in Crescent Point Energy on January 19, 2024 and sell it today you would earn a total of 457.00 from holding Crescent Point Energy or generate 64.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Crescent Point Energy vs. Ishares Sp 500
Performance |
| Timeline |
| Crescent Point Energy |
| Ishares Sp 500 |
Crescent Point and Ishares Sp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Crescent Point and Ishares Sp
The main advantage of trading using opposite Crescent Point and Ishares Sp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crescent Point position performs unexpectedly, Ishares Sp 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 Ishares Sp will offset losses from the drop in Ishares Sp's long position.| Crescent Point vs. Baytex Energy Corp | Crescent Point vs. Whitecap Resources | Crescent Point vs. Cenovus Energy | Crescent Point vs. ARC 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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