Correlation Between Chord Energy and ConocoPhillips
Can any of the company-specific risk be diversified away by investing in both Chord Energy and ConocoPhillips 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 Chord Energy and ConocoPhillips into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chord Energy Corp and ConocoPhillips, you can compare the effects of market volatilities on Chord Energy and ConocoPhillips 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 Chord Energy with a short position of ConocoPhillips. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chord Energy and ConocoPhillips.
Diversification Opportunities for Chord Energy and ConocoPhillips
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Chord and ConocoPhillips is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Chord Energy Corp and ConocoPhillips in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ConocoPhillips and Chord Energy 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 Chord Energy Corp are associated (or correlated) with ConocoPhillips. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ConocoPhillips has no effect on the direction of Chord Energy i.e., Chord Energy and ConocoPhillips go up and down completely randomly.
Pair Corralation between Chord Energy and ConocoPhillips
Given the investment horizon of 90 days Chord Energy Corp is expected to generate 1.28 times more return on investment than ConocoPhillips. However, Chord Energy is 1.28 times more volatile than ConocoPhillips. It trades about 0.28 of its potential returns per unit of risk. ConocoPhillips is currently generating about 0.16 per unit of risk. If you would invest 17,316 in Chord Energy Corp on January 26, 2024 and sell it today you would earn a total of 1,043 from holding Chord Energy Corp or generate 6.02% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Chord Energy Corp vs. ConocoPhillips
Performance |
Timeline |
Chord Energy Corp |
ConocoPhillips |
Chord Energy and ConocoPhillips Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Chord Energy and ConocoPhillips
The main advantage of trading using opposite Chord Energy and ConocoPhillips positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chord Energy position performs unexpectedly, ConocoPhillips 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 ConocoPhillips will offset losses from the drop in ConocoPhillips' long position.Chord Energy vs. Civitas Resources | Chord Energy vs. Coterra Energy | Chord Energy vs. HF Sinclair Corp | Chord Energy vs. Magnolia Oil Gas |
ConocoPhillips vs. Diamondback Energy | ConocoPhillips vs. Pioneer Natural Resources | ConocoPhillips vs. APA Corporation | ConocoPhillips vs. Hess 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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