Correlation Between Crescent Energy and CHKEL Old

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

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

Diversification Opportunities for Crescent Energy and CHKEL Old

-0.48

Correlation Coefficient

Crescent Energy  CHKEL Old

Very good diversification

The 3 months correlation between Crescent and CHKEL is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Crescent Energy Co and CHKEL Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHKEL Old and Crescent 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 Crescent Energy Co are associated (or correlated) with CHKEL Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHKEL Old has no effect on the direction of Crescent Energy i.e., Crescent Energy and CHKEL Old go up and down completely randomly.

Pair Corralation between Crescent Energy and CHKEL Old

If you would invest  1,229  in Crescent Energy Co on October 24, 2024 and sell it today you would earn a total of  397.00  from holding Crescent Energy Co or generate 32.3% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	1.69%
Values	Daily Returns

Crescent Energy Co  vs.  CHKEL Old

Crescent Energy

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Crescent Energy Co are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal technical and fundamental indicators, Crescent Energy showed solid returns over the last few months and may actually be approaching a breakup point.

CHKEL Old

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CHKEL Old has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent technical and fundamental indicators, CHKEL Old is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Crescent Energy and CHKEL Old

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

The idea behind Crescent Energy Co and CHKEL Old 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.