Correlation Between Barnwell Industries and PHX Minerals
Can any of the company-specific risk be diversified away by investing in both Barnwell Industries and PHX Minerals 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 Barnwell Industries and PHX Minerals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barnwell Industries and PHX Minerals, you can compare the effects of market volatilities on Barnwell Industries and PHX Minerals 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 Barnwell Industries with a short position of PHX Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barnwell Industries and PHX Minerals.
Diversification Opportunities for Barnwell Industries and PHX Minerals
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Barnwell and PHX is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Barnwell Industries and PHX Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PHX Minerals and Barnwell Industries 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 Barnwell Industries are associated (or correlated) with PHX Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PHX Minerals has no effect on the direction of Barnwell Industries i.e., Barnwell Industries and PHX Minerals go up and down completely randomly.
Pair Corralation between Barnwell Industries and PHX Minerals
Considering the 90-day investment horizon Barnwell Industries is expected to under-perform the PHX Minerals. In addition to that, Barnwell Industries is 1.22 times more volatile than PHX Minerals. It trades about -0.03 of its total potential returns per unit of risk. PHX Minerals is currently generating about 0.03 per unit of volatility. If you would invest 324.00 in PHX Minerals on August 27, 2024 and sell it today you would earn a total of 57.00 from holding PHX Minerals or generate 17.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barnwell Industries vs. PHX Minerals
Performance |
| Timeline |
| Barnwell Industries |
| PHX Minerals |
Barnwell Industries and PHX Minerals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barnwell Industries and PHX Minerals
The main advantage of trading using opposite Barnwell Industries and PHX Minerals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barnwell Industries position performs unexpectedly, PHX Minerals 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 PHX Minerals will offset losses from the drop in PHX Minerals' long position.| Barnwell Industries vs. Houston American Energy | Barnwell Industries vs. Mexco Energy | Barnwell Industries vs. PHX Minerals | Barnwell Industries vs. Ring Energy |
| PHX Minerals vs. Devon Energy | PHX Minerals vs. ConocoPhillips | PHX Minerals vs. Occidental Petroleum | PHX Minerals vs. Permian Resources |
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 CEOs Directory module to screen CEOs from public companies around the world.
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