Correlation Between Expand Energy and Vitesse Energy
Can any of the company-specific risk be diversified away by investing in both Expand Energy and Vitesse Energy 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 Vitesse Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Expand Energy and Vitesse Energy, you can compare the effects of market volatilities on Expand Energy and Vitesse Energy 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 Vitesse Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Expand Energy and Vitesse Energy.
Diversification Opportunities for Expand Energy and Vitesse Energy
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Expand and Vitesse is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Expand Energy and Vitesse Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vitesse Energy 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 Vitesse Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vitesse Energy has no effect on the direction of Expand Energy i.e., Expand Energy and Vitesse Energy go up and down completely randomly.
Pair Corralation between Expand Energy and Vitesse Energy
Considering the 90-day investment horizon Expand Energy is expected to generate 1.2 times more return on investment than Vitesse Energy. However, Expand Energy is 1.2 times more volatile than Vitesse Energy. It trades about 0.29 of its potential returns per unit of risk. Vitesse Energy is currently generating about 0.14 per unit of risk. If you would invest 7,155 in Expand Energy on August 28, 2024 and sell it today you would earn a total of 2,732 from holding Expand Energy or generate 38.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Expand Energy vs. Vitesse Energy
Performance |
| Timeline |
| Expand Energy |
| Vitesse Energy |
Expand Energy and Vitesse Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Expand Energy and Vitesse Energy
The main advantage of trading using opposite Expand Energy and Vitesse Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Expand Energy position performs unexpectedly, Vitesse Energy 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 Vitesse Energy will offset losses from the drop in Vitesse Energy'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 |
| Vitesse Energy vs. Devon Energy | Vitesse Energy vs. ConocoPhillips | Vitesse Energy vs. Occidental Petroleum | Vitesse Energy vs. Permian Resources |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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