Correlation Between Coterra Energy and Southern Cross

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

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

Diversification Opportunities for Coterra Energy and Southern Cross

-0.71

Correlation Coefficient

Coterra Energy  Southern Cross

Pay attention - limited upside

The 3 months correlation between Coterra and Southern is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Coterra Energy and Southern Cross Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southern Cross Media and Coterra 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 Coterra Energy are associated (or correlated) with Southern Cross. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southern Cross Media has no effect on the direction of Coterra Energy i.e., Coterra Energy and Southern Cross go up and down completely randomly.

Pair Corralation between Coterra Energy and Southern Cross

Given the investment horizon of 90 days Coterra Energy is expected to generate 0.37 times more return on investment than Southern Cross. However, Coterra Energy is 2.69 times less risky than Southern Cross. It trades about 0.02 of its potential returns per unit of risk. Southern Cross Media is currently generating about -0.08 per unit of risk. If you would invest  2,331  in Coterra Energy on September 13, 2024 and sell it today you would earn a total of  231.00  from holding Coterra Energy or generate 9.91% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	99.8%
Values	Daily Returns

Coterra Energy  vs.  Southern Cross Media

Coterra Energy

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Coterra Energy are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating basic indicators, Coterra Energy may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Southern Cross Media

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Coterra Energy and Southern Cross

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

The idea behind Coterra Energy and Southern Cross Media 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.