Correlation Between Occidental Petroleum and C Mer
Can any of the company-specific risk be diversified away by investing in both Occidental Petroleum and C Mer 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 Occidental Petroleum and C Mer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Occidental Petroleum and C Mer Industries, you can compare the effects of market volatilities on Occidental Petroleum and C Mer 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 Occidental Petroleum with a short position of C Mer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Occidental Petroleum and C Mer.
Diversification Opportunities for Occidental Petroleum and C Mer
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Occidental and CMER is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Occidental Petroleum and C Mer Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on C Mer Industries and Occidental Petroleum 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 Occidental Petroleum are associated (or correlated) with C Mer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of C Mer Industries has no effect on the direction of Occidental Petroleum i.e., Occidental Petroleum and C Mer go up and down completely randomly.
Pair Corralation between Occidental Petroleum and C Mer
Considering the 90-day investment horizon Occidental Petroleum is expected to generate 0.48 times more return on investment than C Mer. However, Occidental Petroleum is 2.07 times less risky than C Mer. It trades about 0.13 of its potential returns per unit of risk. C Mer Industries is currently generating about -0.37 per unit of risk. If you would invest 6,406 in Occidental Petroleum on January 19, 2024 and sell it today you would earn a total of 205.00 from holding Occidental Petroleum or generate 3.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 86.36% |
| Values | Daily Returns |
Occidental Petroleum vs. C Mer Industries
Performance |
| Timeline |
| Occidental Petroleum |
| C Mer Industries |
Occidental Petroleum and C Mer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Occidental Petroleum and C Mer
The main advantage of trading using opposite Occidental Petroleum and C Mer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Occidental Petroleum position performs unexpectedly, C Mer 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 C Mer will offset losses from the drop in C Mer's long position.| Occidental Petroleum vs. Pioneer Natural Resources | Occidental Petroleum vs. Coterra Energy | Occidental Petroleum vs. Diamondback Energy | Occidental Petroleum vs. ConocoPhillips |
| C Mer vs. EN Shoham Business | C Mer vs. Accel Solutions Group | C Mer vs. Mivtach Shamir | C Mer vs. Rani Zim Shopping |
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 Stocks Directory module to find actively traded stocks across global markets.
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