Correlation Between Expand Energy and Mach Natural
Can any of the company-specific risk be diversified away by investing in both Expand Energy and Mach Natural 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 Expand Energy and Mach Natural into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Expand Energy and Mach Natural Resources, you can compare the effects of market volatilities on Expand Energy and Mach Natural 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 Expand Energy with a short position of Mach Natural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Expand Energy and Mach Natural.
Diversification Opportunities for Expand Energy and Mach Natural
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Expand and Mach is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Expand Energy and Mach Natural Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mach Natural Resources and Expand Energy 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 Expand Energy are associated (or correlated) with Mach Natural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mach Natural Resources has no effect on the direction of Expand Energy i.e., Expand Energy and Mach Natural go up and down completely randomly.
Pair Corralation between Expand Energy and Mach Natural
Considering the 90-day investment horizon Expand Energy is expected to generate 0.63 times more return on investment than Mach Natural. However, Expand Energy is 1.6 times less risky than Mach Natural. It trades about -0.03 of its potential returns per unit of risk. Mach Natural Resources is currently generating about -0.19 per unit of risk. If you would invest 10,636 in Expand Energy on November 18, 2024 and sell it today you would lose (103.00) from holding Expand Energy or give up 0.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Expand Energy vs. Mach Natural Resources
Performance |
| Timeline |
| Expand Energy |
| Mach Natural Resources |
Expand Energy and Mach Natural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Expand Energy and Mach Natural
The main advantage of trading using opposite Expand Energy and Mach Natural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Expand Energy position performs unexpectedly, Mach Natural 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 Mach Natural will offset losses from the drop in Mach Natural's long position.| Expand Energy vs. Black Spade Acquisition | Expand Energy vs. Perella Weinberg Partners | Expand Energy vs. Taiwan Semiconductor Manufacturing | Expand Energy vs. Cirrus Logic |
| Mach Natural vs. SkyWest | Mach Natural vs. NetEase | Mach Natural vs. Air Transport Services | Mach Natural vs. Global Crossing Airlines |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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