Correlation Between Mogul Energy and Permian Resources
Can any of the company-specific risk be diversified away by investing in both Mogul Energy and Permian 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 Mogul Energy and Permian Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mogul Energy International and Permian Resources, you can compare the effects of market volatilities on Mogul Energy and Permian 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 Mogul Energy with a short position of Permian Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mogul Energy and Permian Resources.
Diversification Opportunities for Mogul Energy and Permian Resources
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mogul and Permian is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Mogul Energy International and Permian Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Permian Resources and Mogul 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 Mogul Energy International are associated (or correlated) with Permian Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Permian Resources has no effect on the direction of Mogul Energy i.e., Mogul Energy and Permian Resources go up and down completely randomly.
Pair Corralation between Mogul Energy and Permian Resources
Given the investment horizon of 90 days Mogul Energy International is expected to under-perform the Permian Resources. In addition to that, Mogul Energy is 5.58 times more volatile than Permian Resources. It trades about -0.03 of its total potential returns per unit of risk. Permian Resources is currently generating about 0.02 per unit of volatility. If you would invest 1,496 in Permian Resources on September 12, 2024 and sell it today you would earn a total of 6.00 from holding Permian Resources or generate 0.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mogul Energy International vs. Permian Resources
Performance |
| Timeline |
| Mogul Energy Interna |
| Permian Resources |
Mogul Energy and Permian Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mogul Energy and Permian Resources
The main advantage of trading using opposite Mogul Energy and Permian Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mogul Energy position performs unexpectedly, Permian 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 Permian Resources will offset losses from the drop in Permian Resources' long position.| Mogul Energy vs. Permian Resources | Mogul Energy vs. Devon Energy | Mogul Energy vs. EOG Resources | Mogul Energy vs. Coterra Energy |
| Permian Resources vs. Evolution Petroleum | Permian Resources vs. Ring Energy | Permian Resources vs. Gran Tierra Energy | Permian Resources vs. PEDEVCO 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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