Correlation Between Greenfire Resources and Range Resources
Can any of the company-specific risk be diversified away by investing in both Greenfire Resources and Range Resources 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 Range Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Greenfire Resources and Range Resources Corp, you can compare the effects of market volatilities on Greenfire Resources and Range Resources 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 Range Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Greenfire Resources and Range Resources.
Diversification Opportunities for Greenfire Resources and Range Resources
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Greenfire and Range is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Greenfire Resources and Range Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Range Resources Corp 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 Range Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Range Resources Corp has no effect on the direction of Greenfire Resources i.e., Greenfire Resources and Range Resources go up and down completely randomly.
Pair Corralation between Greenfire Resources and Range Resources
Considering the 90-day investment horizon Greenfire Resources is expected to under-perform the Range Resources. In addition to that, Greenfire Resources is 1.24 times more volatile than Range Resources Corp. It trades about -0.01 of its total potential returns per unit of risk. Range Resources Corp is currently generating about 0.04 per unit of volatility. If you would invest 2,605 in Range Resources Corp on September 14, 2024 and sell it today you would earn a total of 963.00 from holding Range Resources Corp or generate 36.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Greenfire Resources vs. Range Resources Corp
Performance |
| Timeline |
| Greenfire Resources |
| Range Resources Corp |
Greenfire Resources and Range Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Greenfire Resources and Range Resources
The main advantage of trading using opposite Greenfire Resources and Range Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Greenfire Resources position performs unexpectedly, Range Resources 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 Range Resources will offset losses from the drop in Range Resources' long position.| Greenfire Resources vs. Evolution Petroleum | Greenfire Resources vs. Ring Energy | Greenfire Resources vs. Gran Tierra Energy | Greenfire Resources vs. Permian Resources |
| Range Resources vs. Antero Resources Corp | Range Resources vs. EQT Corporation | Range Resources vs. Comstock Resources | Range Resources 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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