Correlation Between Lycos Energy and Petrus Resources
Can any of the company-specific risk be diversified away by investing in both Lycos Energy and Petrus 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 Lycos Energy and Petrus Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lycos Energy and Petrus Resources, you can compare the effects of market volatilities on Lycos Energy and Petrus 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 Lycos Energy with a short position of Petrus Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lycos Energy and Petrus Resources.
Diversification Opportunities for Lycos Energy and Petrus Resources
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lycos and Petrus is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Lycos Energy and Petrus Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Petrus Resources and Lycos 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 Lycos Energy are associated (or correlated) with Petrus Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Petrus Resources has no effect on the direction of Lycos Energy i.e., Lycos Energy and Petrus Resources go up and down completely randomly.
Pair Corralation between Lycos Energy and Petrus Resources
Assuming the 90 days horizon Lycos Energy is expected to under-perform the Petrus Resources. In addition to that, Lycos Energy is 2.48 times more volatile than Petrus Resources. It trades about -0.03 of its total potential returns per unit of risk. Petrus Resources is currently generating about -0.02 per unit of volatility. If you would invest 145.00 in Petrus Resources on September 1, 2024 and sell it today you would lose (1.00) from holding Petrus Resources or give up 0.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Lycos Energy vs. Petrus Resources
Performance |
| Timeline |
| Lycos Energy |
| Petrus Resources |
Lycos Energy and Petrus Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lycos Energy and Petrus Resources
The main advantage of trading using opposite Lycos Energy and Petrus Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lycos Energy position performs unexpectedly, Petrus 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 Petrus Resources will offset losses from the drop in Petrus Resources' long position.| Lycos Energy vs. Definity Financial Corp | Lycos Energy vs. Plaza Retail REIT | Lycos Energy vs. NorthWest Healthcare Properties | Lycos Energy vs. Pollard Banknote Limited |
| Petrus Resources vs. InPlay Oil Corp | Petrus Resources vs. Yangarra Resources | Petrus Resources vs. Pine Cliff Energy |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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