Correlation Between Denbury Resources and PrimeEnergy
Can any of the company-specific risk be diversified away by investing in both Denbury Resources and PrimeEnergy 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 Denbury Resources and PrimeEnergy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Denbury Resources and PrimeEnergy, you can compare the effects of market volatilities on Denbury Resources and PrimeEnergy 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 Denbury Resources with a short position of PrimeEnergy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Denbury Resources and PrimeEnergy.
Diversification Opportunities for Denbury Resources and PrimeEnergy
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Denbury and PrimeEnergy is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Denbury Resources and PrimeEnergy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PrimeEnergy and Denbury 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 Denbury Resources are associated (or correlated) with PrimeEnergy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PrimeEnergy has no effect on the direction of Denbury Resources i.e., Denbury Resources and PrimeEnergy go up and down completely randomly.
Pair Corralation between Denbury Resources and PrimeEnergy
If you would invest 17,010 in PrimeEnergy on August 25, 2024 and sell it today you would earn a total of 3,285 from holding PrimeEnergy or generate 19.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 4.35% |
| Values | Daily Returns |
Denbury Resources vs. PrimeEnergy
Performance |
| Timeline |
| Denbury Resources |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| PrimeEnergy |
Denbury Resources and PrimeEnergy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Denbury Resources and PrimeEnergy
The main advantage of trading using opposite Denbury Resources and PrimeEnergy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Denbury Resources position performs unexpectedly, PrimeEnergy 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 PrimeEnergy will offset losses from the drop in PrimeEnergy's long position.| Denbury Resources vs. Matador Resources | Denbury Resources vs. Murphy Oil | Denbury Resources vs. Civitas Resources | Denbury Resources vs. Chord Energy Corp |
| PrimeEnergy vs. Epsilon Energy | PrimeEnergy vs. Crescent Energy Co | PrimeEnergy vs. Evolution Petroleum | PrimeEnergy vs. MorningStar Partners, LP |
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 Stocks Directory module to find actively traded stocks across global markets.
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