Correlation Between GeoPark and PEDEVCO Corp
Can any of the company-specific risk be diversified away by investing in both GeoPark and PEDEVCO Corp 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 GeoPark and PEDEVCO Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GeoPark and PEDEVCO Corp, you can compare the effects of market volatilities on GeoPark and PEDEVCO Corp 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 GeoPark with a short position of PEDEVCO Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of GeoPark and PEDEVCO Corp.
Diversification Opportunities for GeoPark and PEDEVCO Corp
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GeoPark and PEDEVCO is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding GeoPark and PEDEVCO Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PEDEVCO Corp and GeoPark 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 GeoPark are associated (or correlated) with PEDEVCO Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PEDEVCO Corp has no effect on the direction of GeoPark i.e., GeoPark and PEDEVCO Corp go up and down completely randomly.
Pair Corralation between GeoPark and PEDEVCO Corp
Given the investment horizon of 90 days GeoPark is expected to generate 7.95 times less return on investment than PEDEVCO Corp. But when comparing it to its historical volatility, GeoPark is 1.35 times less risky than PEDEVCO Corp. It trades about 0.0 of its potential returns per unit of risk. PEDEVCO Corp is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 92.00 in PEDEVCO Corp on August 26, 2024 and sell it today you would lose (5.00) from holding PEDEVCO Corp or give up 5.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GeoPark vs. PEDEVCO Corp
Performance |
| Timeline |
| GeoPark |
| PEDEVCO Corp |
GeoPark and PEDEVCO Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GeoPark and PEDEVCO Corp
The main advantage of trading using opposite GeoPark and PEDEVCO Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GeoPark position performs unexpectedly, PEDEVCO Corp 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 PEDEVCO Corp will offset losses from the drop in PEDEVCO Corp's long position.| GeoPark vs. Evolution Petroleum | GeoPark vs. Granite Ridge Resources | GeoPark vs. PHX Minerals | GeoPark vs. California Resources Corp |
| PEDEVCO Corp vs. Gran Tierra Energy | PEDEVCO Corp vs. Permian Resources | PEDEVCO Corp vs. PermRock Royalty Trust | PEDEVCO Corp vs. MV Oil Trust |
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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