Correlation Between EOG Resources and ConocoPhillips
Can any of the company-specific risk be diversified away by investing in both EOG Resources and ConocoPhillips 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 EOG Resources and ConocoPhillips into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EOG Resources and ConocoPhillips, you can compare the effects of market volatilities on EOG Resources and ConocoPhillips 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 EOG Resources with a short position of ConocoPhillips. Check out your portfolio center. Please also check ongoing floating volatility patterns of EOG Resources and ConocoPhillips.
Diversification Opportunities for EOG Resources and ConocoPhillips
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between EOG and ConocoPhillips is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding EOG Resources and ConocoPhillips in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ConocoPhillips and EOG Resources 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 EOG Resources are associated (or correlated) with ConocoPhillips. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ConocoPhillips has no effect on the direction of EOG Resources i.e., EOG Resources and ConocoPhillips go up and down completely randomly.
Pair Corralation between EOG Resources and ConocoPhillips
Considering the 90-day investment horizon EOG Resources is expected to generate 2.64 times less return on investment than ConocoPhillips. In addition to that, EOG Resources is 1.01 times more volatile than ConocoPhillips. It trades about 0.05 of its total potential returns per unit of risk. ConocoPhillips is currently generating about 0.12 per unit of volatility. If you would invest 9,291 in ConocoPhillips on June 3, 2025 and sell it today you would earn a total of 606.00 from holding ConocoPhillips or generate 6.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
EOG Resources vs. ConocoPhillips
Performance |
| Timeline |
| EOG Resources |
| ConocoPhillips |
EOG Resources and ConocoPhillips Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EOG Resources and ConocoPhillips
The main advantage of trading using opposite EOG Resources and ConocoPhillips positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EOG Resources position performs unexpectedly, ConocoPhillips 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 ConocoPhillips will offset losses from the drop in ConocoPhillips' long position.| EOG Resources vs. Expand Energy | EOG Resources vs. Comstock Resources | EOG Resources vs. Kosmos Energy | EOG Resources vs. Northern Oil Gas |
| ConocoPhillips vs. EOG Resources | ConocoPhillips vs. Devon Energy | ConocoPhillips vs. Diamondback Energy | ConocoPhillips vs. Chevron Corp |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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