Correlation Between Pine Cliff and CNOOC

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Can any of the company-specific risk be diversified away by investing in both Pine Cliff and CNOOC 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 Pine Cliff and CNOOC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pine Cliff Energy and CNOOC Limited, you can compare the effects of market volatilities on Pine Cliff and CNOOC 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 Pine Cliff with a short position of CNOOC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pine Cliff and CNOOC.

Diversification Opportunities for Pine Cliff and CNOOC

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  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Pine and CNOOC is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Pine Cliff Energy and CNOOC Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CNOOC Limited and Pine Cliff 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 Pine Cliff Energy are associated (or correlated) with CNOOC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CNOOC Limited has no effect on the direction of Pine Cliff i.e., Pine Cliff and CNOOC go up and down completely randomly.

Pair Corralation between Pine Cliff and CNOOC

If you would invest (100.00) in CNOOC Limited on December 29, 2023 and sell it today you would earn a total of  100.00  from holding CNOOC Limited or generate -100.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

Pine Cliff Energy  vs.  CNOOC Limited

 Performance 
       Timeline  
Pine Cliff Energy 

Risk-Adjusted Performance

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Over the last 90 days Pine Cliff Energy 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 April 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.
CNOOC Limited 

Risk-Adjusted Performance

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High
Very Weak
Over the last 90 days CNOOC Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, CNOOC is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pine Cliff and CNOOC Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Pine Cliff and CNOOC

The main advantage of trading using opposite Pine Cliff and CNOOC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pine Cliff position performs unexpectedly, CNOOC 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 CNOOC will offset losses from the drop in CNOOC's long position.
The idea behind Pine Cliff Energy and CNOOC Limited 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.

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