Correlation Between Calumet Specialty and Northern Oil
Can any of the company-specific risk be diversified away by investing in both Calumet Specialty and Northern Oil 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 Calumet Specialty and Northern Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Calumet Specialty Products and Northern Oil Gas, you can compare the effects of market volatilities on Calumet Specialty and Northern Oil 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 Calumet Specialty with a short position of Northern Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calumet Specialty and Northern Oil.
Diversification Opportunities for Calumet Specialty and Northern Oil
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Calumet and Northern is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Calumet Specialty Products and Northern Oil Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northern Oil Gas and Calumet Specialty 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 Calumet Specialty Products are associated (or correlated) with Northern Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northern Oil Gas has no effect on the direction of Calumet Specialty i.e., Calumet Specialty and Northern Oil go up and down completely randomly.
Pair Corralation between Calumet Specialty and Northern Oil
Given the investment horizon of 90 days Calumet Specialty Products is expected to generate 0.85 times more return on investment than Northern Oil. However, Calumet Specialty Products is 1.17 times less risky than Northern Oil. It trades about 0.18 of its potential returns per unit of risk. Northern Oil Gas is currently generating about -0.02 per unit of risk. If you would invest 1,484 in Calumet Specialty Products on August 21, 2025 and sell it today you would earn a total of 424.00 from holding Calumet Specialty Products or generate 28.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Calumet Specialty Products vs. Northern Oil Gas
Performance |
| Timeline |
| Calumet Specialty |
| Northern Oil Gas |
Calumet Specialty and Northern Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Calumet Specialty and Northern Oil
The main advantage of trading using opposite Calumet Specialty and Northern Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calumet Specialty position performs unexpectedly, Northern Oil 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 Northern Oil will offset losses from the drop in Northern Oil's long position.| Calumet Specialty vs. Talos Energy | Calumet Specialty vs. Baytex Energy Corp | Calumet Specialty vs. Nextdecade Corp | Calumet Specialty vs. World Kinect |
| Northern Oil vs. Greenfire Resources | Northern Oil vs. Obsidian Energy | Northern Oil vs. Forum Energy Technologies | Northern Oil vs. Ranger Energy Services |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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