Correlation Between Expand Energy and Hess
Can any of the company-specific risk be diversified away by investing in both Expand Energy and Hess 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 Hess into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Expand Energy and Hess Corporation, you can compare the effects of market volatilities on Expand Energy and Hess 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 Hess. Check out your portfolio center. Please also check ongoing floating volatility patterns of Expand Energy and Hess.
Diversification Opportunities for Expand Energy and Hess
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Expand and Hess is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Expand Energy and Hess Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hess 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 Hess. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hess has no effect on the direction of Expand Energy i.e., Expand Energy and Hess go up and down completely randomly.
Pair Corralation between Expand Energy and Hess
Assuming the 90 days horizon Expand Energy is expected to generate 1.24 times less return on investment than Hess. In addition to that, Expand Energy is 2.37 times more volatile than Hess Corporation. It trades about 0.38 of its total potential returns per unit of risk. Hess Corporation is currently generating about 1.1 per unit of volatility. If you would invest 12,966 in Hess Corporation on October 23, 2024 and sell it today you would earn a total of 2,169 from holding Hess Corporation or generate 16.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Expand Energy vs. Hess Corp.
Performance |
| Timeline |
| Expand Energy |
| Hess |
Expand Energy and Hess Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Expand Energy and Hess
The main advantage of trading using opposite Expand Energy and Hess positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Expand Energy position performs unexpectedly, Hess 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 Hess will offset losses from the drop in Hess' long position.| Expand Energy vs. Amkor Technology | Expand Energy vs. National Beverage Corp | Expand Energy vs. Fomento Economico Mexicano | Expand Energy vs. Radcom |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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