Correlation Between Crescent Point and Ovintiv

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

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

Diversification Opportunities for Crescent Point and Ovintiv

-0.5

Correlation Coefficient

Crescent Point  Ovintiv

Very good diversification

The 3 months correlation between Crescent and Ovintiv is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Crescent Point Energy and Ovintiv in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ovintiv and Crescent Point 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 Point Energy are associated (or correlated) with Ovintiv. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ovintiv has no effect on the direction of Crescent Point i.e., Crescent Point and Ovintiv go up and down completely randomly.

Pair Corralation between Crescent Point and Ovintiv

If you would invest  799.00  in Crescent Point Energy on September 24, 2024 and sell it today you would earn a total of  0.00  from holding Crescent Point Energy or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	1.54%
Values	Daily Returns

Crescent Point Energy  vs.  Ovintiv

Crescent Point Energy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Crescent Point Energy has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Crescent Point is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Ovintiv

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ovintiv has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Ovintiv is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Crescent Point and Ovintiv

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

The idea behind Crescent Point Energy and Ovintiv 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 Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..