Correlation Between MMEX Resources and Strat Petroleum
Can any of the company-specific risk be diversified away by investing in both MMEX Resources and Strat Petroleum 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 MMEX Resources and Strat Petroleum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MMEX Resources Corp and Strat Petroleum, you can compare the effects of market volatilities on MMEX Resources and Strat Petroleum 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 MMEX Resources with a short position of Strat Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of MMEX Resources and Strat Petroleum.
Diversification Opportunities for MMEX Resources and Strat Petroleum
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between MMEX and Strat is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding MMEX Resources Corp and Strat Petroleum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strat Petroleum and MMEX Resources 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 MMEX Resources Corp are associated (or correlated) with Strat Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strat Petroleum has no effect on the direction of MMEX Resources i.e., MMEX Resources and Strat Petroleum go up and down completely randomly.
Pair Corralation between MMEX Resources and Strat Petroleum
Given the investment horizon of 90 days MMEX Resources Corp is expected to generate 1.37 times more return on investment than Strat Petroleum. However, MMEX Resources is 1.37 times more volatile than Strat Petroleum. It trades about 0.27 of its potential returns per unit of risk. Strat Petroleum is currently generating about 0.21 per unit of risk. If you would invest 0.01 in MMEX Resources Corp on September 13, 2024 and sell it today you would earn a total of 0.00 from holding MMEX Resources Corp or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
MMEX Resources Corp vs. Strat Petroleum
Performance |
| Timeline |
| MMEX Resources Corp |
| Strat Petroleum |
MMEX Resources and Strat Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MMEX Resources and Strat Petroleum
The main advantage of trading using opposite MMEX Resources and Strat Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MMEX Resources position performs unexpectedly, Strat Petroleum 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 Strat Petroleum will offset losses from the drop in Strat Petroleum's long position.| MMEX Resources vs. MDM Permian | MMEX Resources vs. Saturn Oil Gas | MMEX Resources vs. Razor Energy Corp | MMEX Resources vs. Strat Petroleum |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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