Correlation Between Greenfire Resources and EQT
Can any of the company-specific risk be diversified away by investing in both Greenfire Resources and EQT 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 Greenfire Resources and EQT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Greenfire Resources and EQT Corporation, you can compare the effects of market volatilities on Greenfire Resources and EQT 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 Greenfire Resources with a short position of EQT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Greenfire Resources and EQT.
Diversification Opportunities for Greenfire Resources and EQT
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Greenfire and EQT is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Greenfire Resources and EQT Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EQT Corporation and Greenfire Resources 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 Greenfire Resources are associated (or correlated) with EQT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EQT Corporation has no effect on the direction of Greenfire Resources i.e., Greenfire Resources and EQT go up and down completely randomly.
Pair Corralation between Greenfire Resources and EQT
Considering the 90-day investment horizon Greenfire Resources is expected to generate 1.44 times less return on investment than EQT. In addition to that, Greenfire Resources is 1.26 times more volatile than EQT Corporation. It trades about 0.04 of its total potential returns per unit of risk. EQT Corporation is currently generating about 0.08 per unit of volatility. If you would invest 3,821 in EQT Corporation on September 15, 2024 and sell it today you would earn a total of 738.00 from holding EQT Corporation or generate 19.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Greenfire Resources vs. EQT Corp.
Performance |
| Timeline |
| Greenfire Resources |
| EQT Corporation |
Greenfire Resources and EQT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Greenfire Resources and EQT
The main advantage of trading using opposite Greenfire Resources and EQT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Greenfire Resources position performs unexpectedly, EQT 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 EQT will offset losses from the drop in EQT's long position.| Greenfire Resources vs. Asure Software | Greenfire Resources vs. Reservoir Media | Greenfire Resources vs. John Wiley Sons | Greenfire Resources vs. Iridium Communications |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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