Correlation Between Bristow and Chord Energy

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

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

Diversification Opportunities for Bristow and Chord Energy

0.51

Correlation Coefficient

Bristow  Chord Energy

Very weak diversification

The 3 months correlation between Bristow and Chord is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Bristow Group and Chord Energy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chord Energy Corp and Bristow 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 Bristow Group are associated (or correlated) with Chord Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chord Energy Corp has no effect on the direction of Bristow i.e., Bristow and Chord Energy go up and down completely randomly.

Pair Corralation between Bristow and Chord Energy

Given the investment horizon of 90 days Bristow Group is expected to generate 1.04 times more return on investment than Chord Energy. However, Bristow is 1.04 times more volatile than Chord Energy Corp. It trades about -0.08 of its potential returns per unit of risk. Chord Energy Corp is currently generating about -0.09 per unit of risk. If you would invest  3,786  in Bristow Group on October 9, 2024 and sell it today you would lose (239.00) from holding Bristow Group or give up 6.31% of portfolio value over 90 days.

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

Bristow Group  vs.  Chord Energy Corp

Bristow Group

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Bristow Group are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Bristow is not utilizing all of its potentials. The newest stock price mess, may contribute to short-term losses for the institutional investors.

Chord Energy Corp

Risk-Adjusted Performance

0 of 100

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 latest inconsistent performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Bristow and Chord Energy

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

The idea behind Bristow Group and Chord Energy Corp 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.