Correlation Between Calumet Specialty and Etrion
Can any of the company-specific risk be diversified away by investing in both Calumet Specialty and Etrion 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 Calumet Specialty and Etrion into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Calumet Specialty Products and Etrion, you can compare the effects of market volatilities on Calumet Specialty and Etrion 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 Calumet Specialty with a short position of Etrion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calumet Specialty and Etrion.
Diversification Opportunities for Calumet Specialty and Etrion
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Calumet and Etrion is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Calumet Specialty Products and Etrion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Etrion and Calumet Specialty 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 Calumet Specialty Products are associated (or correlated) with Etrion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Etrion has no effect on the direction of Calumet Specialty i.e., Calumet Specialty and Etrion go up and down completely randomly.
Pair Corralation between Calumet Specialty and Etrion
Given the investment horizon of 90 days Calumet Specialty Products is expected to generate 0.1 times more return on investment than Etrion. However, Calumet Specialty Products is 9.74 times less risky than Etrion. It trades about 0.31 of its potential returns per unit of risk. Etrion is currently generating about -0.22 per unit of risk. If you would invest 1,422 in Calumet Specialty Products on January 25, 2024 and sell it today you would earn a total of 198.00 from holding Calumet Specialty Products or generate 13.92% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Calumet Specialty Products vs. Etrion
Performance |
Timeline |
Calumet Specialty |
Etrion |
Calumet Specialty and Etrion Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Calumet Specialty and Etrion
The main advantage of trading using opposite Calumet Specialty and Etrion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calumet Specialty position performs unexpectedly, Etrion 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 Etrion will offset losses from the drop in Etrion's long position.Calumet Specialty vs. SilverBow Resources | Calumet Specialty vs. Vital Energy | Calumet Specialty vs. Permian Resources | Calumet Specialty vs. Magnolia Oil Gas |
Etrion vs. American Water Works | Etrion vs. Middlesex Water | Etrion vs. SJW Corporation | Etrion vs. California Water Service |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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