Correlation Between CKX Lands and Permian Resources
Can any of the company-specific risk be diversified away by investing in both CKX Lands and Permian 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 CKX Lands and Permian Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CKX Lands and Permian Resources, you can compare the effects of market volatilities on CKX Lands and Permian 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 CKX Lands with a short position of Permian Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of CKX Lands and Permian Resources.
Diversification Opportunities for CKX Lands and Permian Resources
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between CKX and Permian is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding CKX Lands and Permian Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Permian Resources and CKX Lands 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 CKX Lands are associated (or correlated) with Permian Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Permian Resources has no effect on the direction of CKX Lands i.e., CKX Lands and Permian Resources go up and down completely randomly.
Pair Corralation between CKX Lands and Permian Resources
Considering the 90-day investment horizon CKX Lands is expected to generate 0.67 times more return on investment than Permian Resources. However, CKX Lands is 1.48 times less risky than Permian Resources. It trades about -0.13 of its potential returns per unit of risk. Permian Resources is currently generating about -0.11 per unit of risk. If you would invest 1,195 in CKX Lands on November 29, 2024 and sell it today you would lose (52.00) from holding CKX Lands or give up 4.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CKX Lands vs. Permian Resources
Performance |
| Timeline |
| CKX Lands |
| Permian Resources |
CKX Lands and Permian Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CKX Lands and Permian Resources
The main advantage of trading using opposite CKX Lands and Permian Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CKX Lands position performs unexpectedly, Permian 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 Permian Resources will offset losses from the drop in Permian Resources' long position.| CKX Lands vs. PrimeEnergy | CKX Lands vs. MorningStar Partners, LP | CKX Lands vs. XXL Energy Corp | CKX Lands vs. Magnolia Oil Gas |
| Permian Resources vs. Devon Energy | Permian Resources vs. EOG Resources | Permian Resources vs. Coterra Energy | Permian Resources vs. Range Resources 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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