Correlation Between EON Resources and Gran Tierra
Can any of the company-specific risk be diversified away by investing in both EON Resources and Gran Tierra 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 EON Resources and Gran Tierra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EON Resources and Gran Tierra Energy, you can compare the effects of market volatilities on EON Resources and Gran Tierra 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 EON Resources with a short position of Gran Tierra. Check out your portfolio center. Please also check ongoing floating volatility patterns of EON Resources and Gran Tierra.
Diversification Opportunities for EON Resources and Gran Tierra
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between EON and Gran is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding EON Resources and Gran Tierra Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gran Tierra Energy and EON 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 EON Resources are associated (or correlated) with Gran Tierra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gran Tierra Energy has no effect on the direction of EON Resources i.e., EON Resources and Gran Tierra go up and down completely randomly.
Pair Corralation between EON Resources and Gran Tierra
Given the investment horizon of 90 days EON Resources is expected to under-perform the Gran Tierra. In addition to that, EON Resources is 2.38 times more volatile than Gran Tierra Energy. It trades about -0.3 of its total potential returns per unit of risk. Gran Tierra Energy is currently generating about -0.05 per unit of volatility. If you would invest 624.00 in Gran Tierra Energy on August 27, 2024 and sell it today you would lose (21.00) from holding Gran Tierra Energy or give up 3.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
EON Resources vs. Gran Tierra Energy
Performance |
| Timeline |
| EON Resources |
| Gran Tierra Energy |
EON Resources and Gran Tierra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EON Resources and Gran Tierra
The main advantage of trading using opposite EON Resources and Gran Tierra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EON Resources position performs unexpectedly, Gran Tierra 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 Gran Tierra will offset losses from the drop in Gran Tierra's long position.| EON Resources vs. Alchemy Investments Acquisition | EON Resources vs. Citi Trends | EON Resources vs. Cedar Realty Trust | EON Resources vs. Stepstone Group |
| Gran Tierra vs. Permian Resources | Gran Tierra vs. PEDEVCO Corp | Gran Tierra vs. Vermilion Energy | Gran Tierra vs. Ovintiv |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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