Correlation Between Journey Energy and PetroShale
Can any of the company-specific risk be diversified away by investing in both Journey Energy and PetroShale 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 Journey Energy and PetroShale into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Journey Energy and PetroShale, you can compare the effects of market volatilities on Journey Energy and PetroShale 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 Journey Energy with a short position of PetroShale. Check out your portfolio center. Please also check ongoing floating volatility patterns of Journey Energy and PetroShale.
Diversification Opportunities for Journey Energy and PetroShale
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Journey and PetroShale is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Journey Energy and PetroShale in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PetroShale and Journey 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 Journey Energy are associated (or correlated) with PetroShale. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PetroShale has no effect on the direction of Journey Energy i.e., Journey Energy and PetroShale go up and down completely randomly.
Pair Corralation between Journey Energy and PetroShale
Assuming the 90 days horizon Journey Energy is expected to under-perform the PetroShale. In addition to that, Journey Energy is 1.0 times more volatile than PetroShale. It trades about -0.16 of its total potential returns per unit of risk. PetroShale is currently generating about 0.02 per unit of volatility. If you would invest 29.00 in PetroShale on September 18, 2024 and sell it today you would earn a total of 0.00 from holding PetroShale or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Journey Energy vs. PetroShale
Performance |
| Timeline |
| Journey Energy |
| PetroShale |
Journey Energy and PetroShale Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Journey Energy and PetroShale
The main advantage of trading using opposite Journey Energy and PetroShale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Journey Energy position performs unexpectedly, PetroShale 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 PetroShale will offset losses from the drop in PetroShale's long position.| Journey Energy vs. POSCO Holdings | Journey Energy vs. Schweizerische Nationalbank | Journey Energy vs. Berkshire Hathaway | Journey Energy vs. Berkshire Hathaway |
| PetroShale vs. POSCO Holdings | PetroShale vs. Schweizerische Nationalbank | PetroShale vs. Berkshire Hathaway | PetroShale vs. Berkshire Hathaway |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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