Correlation Between Expand Energy and Permianville Royalty
Can any of the company-specific risk be diversified away by investing in both Expand Energy and Permianville Royalty 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 Permianville Royalty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Expand Energy and Permianville Royalty Trust, you can compare the effects of market volatilities on Expand Energy and Permianville Royalty 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 Permianville Royalty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Expand Energy and Permianville Royalty.
Diversification Opportunities for Expand Energy and Permianville Royalty
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Expand and Permianville is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Expand Energy and Permianville Royalty Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Permianville Royalty 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 Permianville Royalty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Permianville Royalty has no effect on the direction of Expand Energy i.e., Expand Energy and Permianville Royalty go up and down completely randomly.
Pair Corralation between Expand Energy and Permianville Royalty
Considering the 90-day investment horizon Expand Energy is expected to generate 1.34 times more return on investment than Permianville Royalty. However, Expand Energy is 1.34 times more volatile than Permianville Royalty Trust. It trades about 0.33 of its potential returns per unit of risk. Permianville Royalty Trust is currently generating about -0.01 per unit of risk. If you would invest 8,475 in Expand Energy on August 28, 2024 and sell it today you would earn a total of 1,412 from holding Expand Energy or generate 16.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Expand Energy vs. Permianville Royalty Trust
Performance |
| Timeline |
| Expand Energy |
| Permianville Royalty |
Expand Energy and Permianville Royalty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Expand Energy and Permianville Royalty
The main advantage of trading using opposite Expand Energy and Permianville Royalty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Expand Energy position performs unexpectedly, Permianville Royalty 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 Permianville Royalty will offset losses from the drop in Permianville Royalty's long position.| Expand Energy vs. Antero Resources Corp | Expand Energy vs. Empire Petroleum Corp | Expand Energy vs. Permian Resources | Expand Energy vs. SandRidge Energy |
| Permianville Royalty vs. Sabine Royalty Trust | Permianville Royalty vs. Cross Timbers Royalty | Permianville Royalty vs. MV Oil Trust | Permianville Royalty vs. San Juan Basin |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Stocks Directory Find actively traded stocks across global markets | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |