Correlation Between Battalion Oil and Condor Petroleum

Can any of the company-specific risk be diversified away by investing in both Battalion Oil and Condor Petroleum 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 Battalion Oil and Condor Petroleum into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Battalion Oil Corp and Condor Petroleum, you can compare the effects of market volatilities on Battalion Oil and Condor Petroleum 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 Battalion Oil with a short position of Condor Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Battalion Oil and Condor Petroleum.

Diversification Opportunities for Battalion Oil and Condor Petroleum

0.68

Correlation Coefficient

Battalion Oil  Condor Petroleum

Poor diversification

The 3 months correlation between Battalion and Condor is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Battalion Oil Corp and Condor Petroleum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Condor Petroleum and Battalion 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 Battalion Oil Corp are associated (or correlated) with Condor Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Condor Petroleum has no effect on the direction of Battalion Oil i.e., Battalion Oil and Condor Petroleum go up and down completely randomly.

Pair Corralation between Battalion Oil and Condor Petroleum

Given the investment horizon of 90 days Battalion Oil Corp is expected to under-perform the Condor Petroleum. In addition to that, Battalion Oil is 2.47 times more volatile than Condor Petroleum. It trades about -0.1 of its total potential returns per unit of risk. Condor Petroleum is currently generating about -0.08 per unit of volatility. If you would invest  154.00  in Condor Petroleum on December 1, 2024 and sell it today you would lose (28.00) from holding Condor Petroleum or give up 18.18% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Battalion Oil Corp  vs.  Condor Petroleum

Battalion Oil Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Battalion Oil Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Condor Petroleum

Risk-Adjusted Performance

Very Weak

Over the last 90 days Condor Petroleum has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Battalion Oil and Condor Petroleum

The main advantage of trading using opposite Battalion Oil and Condor Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Battalion Oil position performs unexpectedly, Condor Petroleum 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 Condor Petroleum will offset losses from the drop in Condor Petroleum's long position.

The idea behind Battalion Oil Corp and Condor Petroleum pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.