Correlation Between CKX Lands and ConocoPhillips

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

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

Diversification Opportunities for CKX Lands and ConocoPhillips

-0.37

Correlation Coefficient

CKX Lands  ConocoPhillips

Very good diversification

The 3 months correlation between CKX and ConocoPhillips is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding CKX Lands and ConocoPhillips in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ConocoPhillips and CKX Lands 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 CKX Lands 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 CKX Lands i.e., CKX Lands and ConocoPhillips go up and down completely randomly.

Pair Corralation between CKX Lands and ConocoPhillips

Considering the 90-day investment horizon CKX Lands is expected to under-perform the ConocoPhillips. In addition to that, CKX Lands is 1.09 times more volatile than ConocoPhillips. It trades about -0.09 of its total potential returns per unit of risk. ConocoPhillips is currently generating about 0.0 per unit of volatility. If you would invest  10,909  in ConocoPhillips on September 2, 2024 and sell it today you would lose (75.00) from holding ConocoPhillips or give up 0.69% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	84.38%
Values	Daily Returns

CKX Lands  vs.  ConocoPhillips

CKX Lands

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CKX Lands has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's forward-looking signals remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

ConocoPhillips

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ConocoPhillips has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, ConocoPhillips is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with CKX Lands and ConocoPhillips

The main advantage of trading using opposite CKX Lands and ConocoPhillips positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CKX Lands 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.

The idea behind CKX Lands and ConocoPhillips 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.