Correlation Between Gran Tierra and PHX Minerals
Can any of the company-specific risk be diversified away by investing in both Gran Tierra and PHX Minerals 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 Gran Tierra and PHX Minerals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gran Tierra Energy and PHX Minerals, you can compare the effects of market volatilities on Gran Tierra and PHX Minerals 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 Gran Tierra with a short position of PHX Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gran Tierra and PHX Minerals.
Diversification Opportunities for Gran Tierra and PHX Minerals
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Gran and PHX is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Gran Tierra Energy and PHX Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PHX Minerals and Gran Tierra 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 Gran Tierra Energy are associated (or correlated) with PHX Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PHX Minerals has no effect on the direction of Gran Tierra i.e., Gran Tierra and PHX Minerals go up and down completely randomly.
Pair Corralation between Gran Tierra and PHX Minerals
Considering the 90-day investment horizon Gran Tierra Energy is expected to under-perform the PHX Minerals. In addition to that, Gran Tierra is 3.14 times more volatile than PHX Minerals. It trades about -0.31 of its total potential returns per unit of risk. PHX Minerals is currently generating about -0.01 per unit of volatility. If you would invest 400.00 in PHX Minerals on November 1, 2024 and sell it today you would lose (1.00) from holding PHX Minerals or give up 0.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gran Tierra Energy vs. PHX Minerals
Performance |
| Timeline |
| Gran Tierra Energy |
| PHX Minerals |
Gran Tierra and PHX Minerals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gran Tierra and PHX Minerals
The main advantage of trading using opposite Gran Tierra and PHX Minerals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gran Tierra position performs unexpectedly, PHX Minerals 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 PHX Minerals will offset losses from the drop in PHX Minerals' long position.| Gran Tierra vs. Permian Resources | Gran Tierra vs. PEDEVCO Corp | Gran Tierra vs. Vermilion Energy | Gran Tierra vs. Ovintiv |
| PHX Minerals vs. Evolution Petroleum | PHX Minerals vs. GeoPark | PHX Minerals vs. Granite Ridge Resources | PHX Minerals vs. California Resources Corp |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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