Correlation Between Chord Energy and Denbury Resources

Can any of the company-specific risk be diversified away by investing in both Chord Energy and Denbury Resources 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 Denbury Resources 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 Denbury Resources, you can compare the effects of market volatilities on Chord Energy and Denbury Resources 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 Denbury Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chord Energy and Denbury Resources.

Diversification Opportunities for Chord Energy and Denbury Resources

0.0

Correlation Coefficient

Chord Energy  Denbury Resources

Pay attention - limited upside

The 3 months correlation between Chord and Denbury is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Chord Energy Corp and Denbury Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Denbury Resources 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 Denbury Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Denbury Resources has no effect on the direction of Chord Energy i.e., Chord Energy and Denbury Resources go up and down completely randomly.

Pair Corralation between Chord Energy and Denbury Resources

If you would invest  11,246  in Chord Energy Corp on December 28, 2024 and sell it today you would lose (73.00) from holding Chord Energy Corp or give up 0.65% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Chord Energy Corp  vs.  Denbury Resources

Chord Energy Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Chord Energy Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Chord Energy is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Denbury Resources

Risk-Adjusted Performance

Very Weak

Over the last 90 days Denbury Resources has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, Denbury Resources is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Chord Energy and Denbury Resources

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

The idea behind Chord Energy Corp and Denbury Resources 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.

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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.