Correlation Between Matador Resources and Atacado SA
Can any of the company-specific risk be diversified away by investing in both Matador Resources and Atacado SA 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 Matador Resources and Atacado SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Matador Resources and Atacado SA, you can compare the effects of market volatilities on Matador Resources and Atacado SA 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 Matador Resources with a short position of Atacado SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Matador Resources and Atacado SA.
Diversification Opportunities for Matador Resources and Atacado SA
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Matador and Atacado is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Matador Resources and Atacado SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atacado SA and Matador 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 Matador Resources are associated (or correlated) with Atacado SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atacado SA has no effect on the direction of Matador Resources i.e., Matador Resources and Atacado SA go up and down completely randomly.
Pair Corralation between Matador Resources and Atacado SA
Given the investment horizon of 90 days Matador Resources is expected to generate 42.16 times more return on investment than Atacado SA. However, Matador Resources is 42.16 times more volatile than Atacado SA. It trades about 0.02 of its potential returns per unit of risk. Atacado SA is currently generating about 0.14 per unit of risk. If you would invest 5,638 in Matador Resources on September 3, 2024 and sell it today you would earn a total of 363.00 from holding Matador Resources or generate 6.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 28.89% |
| Values | Daily Returns |
Matador Resources vs. Atacado SA
Performance |
| Timeline |
| Matador Resources |
| Atacado SA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Matador Resources and Atacado SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Matador Resources and Atacado SA
The main advantage of trading using opposite Matador Resources and Atacado SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Matador Resources position performs unexpectedly, Atacado SA 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 Atacado SA will offset losses from the drop in Atacado SA's long position.| Matador Resources vs. Granite Ridge Resources | Matador Resources vs. North European Oil | Matador Resources vs. CNX Resources Corp | Matador Resources vs. GeoPark |
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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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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