Correlation Between Berry Petroleum and Matador Resources
Can any of the company-specific risk be diversified away by investing in both Berry Petroleum and Matador Resources 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 Berry Petroleum and Matador Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Berry Petroleum Corp and Matador Resources, you can compare the effects of market volatilities on Berry Petroleum and Matador Resources 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 Berry Petroleum with a short position of Matador Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Berry Petroleum and Matador Resources.
Diversification Opportunities for Berry Petroleum and Matador Resources
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Berry and Matador is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Berry Petroleum Corp and Matador Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Matador Resources and Berry Petroleum 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 Berry Petroleum Corp are associated (or correlated) with Matador Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Matador Resources has no effect on the direction of Berry Petroleum i.e., Berry Petroleum and Matador Resources go up and down completely randomly.
Pair Corralation between Berry Petroleum and Matador Resources
Considering the 90-day investment horizon Berry Petroleum Corp is expected to under-perform the Matador Resources. In addition to that, Berry Petroleum is 1.24 times more volatile than Matador Resources. It trades about -0.19 of its total potential returns per unit of risk. Matador Resources is currently generating about 0.1 per unit of volatility. If you would invest 5,308 in Matador Resources on September 2, 2024 and sell it today you would earn a total of 693.00 from holding Matador Resources or generate 13.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Berry Petroleum Corp vs. Matador Resources
Performance |
| Timeline |
| Berry Petroleum Corp |
| Matador Resources |
Berry Petroleum and Matador Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Berry Petroleum and Matador Resources
The main advantage of trading using opposite Berry Petroleum and Matador Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Berry Petroleum position performs unexpectedly, Matador Resources 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 Matador Resources will offset losses from the drop in Matador Resources' long position.| Berry Petroleum vs. Epsilon Energy | Berry Petroleum vs. Crescent Energy Co | Berry Petroleum vs. Evolution Petroleum | Berry Petroleum vs. XXL Energy Corp |
| Matador Resources vs. Epsilon Energy | Matador Resources vs. Crescent Energy Co | Matador Resources vs. Evolution Petroleum | Matador Resources vs. XXL Energy 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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