Correlation Between Ranger Oil and Crescent Point

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

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

Diversification Opportunities for Ranger Oil and Crescent Point

0.6

Correlation Coefficient

Ranger Oil  Crescent Point

Poor diversification

The 3 months correlation between Ranger and Crescent is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Ranger Oil Corp and Crescent Point Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crescent Point Energy and Ranger Oil 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 Ranger Oil Corp are associated (or correlated) with Crescent Point. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crescent Point Energy has no effect on the direction of Ranger Oil i.e., Ranger Oil and Crescent Point go up and down completely randomly.

Pair Corralation between Ranger Oil and Crescent Point

Given the investment horizon of 90 days Ranger Oil is expected to generate 11.68 times less return on investment than Crescent Point. In addition to that, Ranger Oil is 1.12 times more volatile than Crescent Point Energy. It trades about 0.0 of its total potential returns per unit of risk. Crescent Point Energy is currently generating about 0.05 per unit of volatility. If you would invest  591.00  in Crescent Point Energy on September 24, 2024 and sell it today you would earn a total of  208.00  from holding Crescent Point Energy or generate 35.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	30.57%
Values	Daily Returns

Ranger Oil Corp  vs.  Crescent Point Energy

Ranger Oil Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ranger Oil Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, Ranger Oil is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

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.

Pair Trading with Ranger Oil and Crescent Point

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

The idea behind Ranger Oil Corp and Crescent Point Energy 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..