Correlation Between Expand Energy and Pinnacle Bank
Can any of the company-specific risk be diversified away by investing in both Expand Energy and Pinnacle Bank 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 Pinnacle Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Expand Energy and Pinnacle Bank, you can compare the effects of market volatilities on Expand Energy and Pinnacle Bank 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 Pinnacle Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Expand Energy and Pinnacle Bank.
Diversification Opportunities for Expand Energy and Pinnacle Bank
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Expand and Pinnacle is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Expand Energy and Pinnacle Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pinnacle Bank 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 Pinnacle Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pinnacle Bank has no effect on the direction of Expand Energy i.e., Expand Energy and Pinnacle Bank go up and down completely randomly.
Pair Corralation between Expand Energy and Pinnacle Bank
Assuming the 90 days horizon Expand Energy is expected to generate 2.33 times more return on investment than Pinnacle Bank. However, Expand Energy is 2.33 times more volatile than Pinnacle Bank. It trades about 0.22 of its potential returns per unit of risk. Pinnacle Bank is currently generating about -0.08 per unit of risk. If you would invest 7,919 in Expand Energy on October 22, 2024 and sell it today you would earn a total of 2,213 from holding Expand Energy or generate 27.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Expand Energy vs. Pinnacle Bank
Performance |
| Timeline |
| Expand Energy |
| Pinnacle Bank |
Expand Energy and Pinnacle Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Expand Energy and Pinnacle Bank
The main advantage of trading using opposite Expand Energy and Pinnacle Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Expand Energy position performs unexpectedly, Pinnacle Bank 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 Pinnacle Bank will offset losses from the drop in Pinnacle Bank's long position.| Expand Energy vs. Suburban Propane Partners | Expand Energy vs. Cheniere Energy Partners | Expand Energy vs. United Utilities Group | Expand Energy vs. Biglari Holdings |
| Pinnacle Bank vs. Truist Financial Corp | Pinnacle Bank vs. PNC Financial Services | Pinnacle Bank vs. KeyCorp | Pinnacle Bank vs. Western Alliance Bancorporation |
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.
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