Correlation Between Granite Ridge and Crescent Energy

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

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

Diversification Opportunities for Granite Ridge and Crescent Energy

0.78

Correlation Coefficient

Granite Ridge  Crescent Energy

Poor diversification

The 3 months correlation between Granite and Crescent is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Granite Ridge Resources and Crescent Energy Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crescent Energy and Granite Ridge 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 Granite Ridge Resources are associated (or correlated) with Crescent Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crescent Energy has no effect on the direction of Granite Ridge i.e., Granite Ridge and Crescent Energy go up and down completely randomly.

Pair Corralation between Granite Ridge and Crescent Energy

Given the investment horizon of 90 days Granite Ridge Resources is expected to generate 0.83 times more return on investment than Crescent Energy. However, Granite Ridge Resources is 1.2 times less risky than Crescent Energy. It trades about 0.03 of its potential returns per unit of risk. Crescent Energy Co is currently generating about -0.16 per unit of risk. If you would invest  607.00  in Granite Ridge Resources on December 30, 2024 and sell it today you would earn a total of  13.00  from holding Granite Ridge Resources or generate 2.14% return on investment over 90 days.

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

Granite Ridge Resources  vs.  Crescent Energy Co

Granite Ridge Resources

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Granite Ridge Resources are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Granite Ridge is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Crescent Energy

Risk-Adjusted Performance

Very Weak

Over the last 90 days Crescent Energy Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Granite Ridge and Crescent Energy

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

The idea behind Granite Ridge Resources and Crescent Energy Co 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.