Correlation Between Matador Resources and Rushnet
Can any of the company-specific risk be diversified away by investing in both Matador Resources and Rushnet 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 Rushnet into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Matador Resources and Rushnet, you can compare the effects of market volatilities on Matador Resources and Rushnet 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 Rushnet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Matador Resources and Rushnet.
Diversification Opportunities for Matador Resources and Rushnet
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Matador and Rushnet is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Matador Resources and Rushnet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rushnet 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 Rushnet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rushnet has no effect on the direction of Matador Resources i.e., Matador Resources and Rushnet go up and down completely randomly.
Pair Corralation between Matador Resources and Rushnet
Given the investment horizon of 90 days Matador Resources is expected to generate 87.92 times less return on investment than Rushnet. But when comparing it to its historical volatility, Matador Resources is 11.84 times less risky than Rushnet. It trades about 0.01 of its potential returns per unit of risk. Rushnet is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 0.14 in Rushnet on September 3, 2024 and sell it today you would lose (0.12) from holding Rushnet or give up 85.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Matador Resources vs. Rushnet
Performance |
| Timeline |
| Matador Resources |
| Rushnet |
Matador Resources and Rushnet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Matador Resources and Rushnet
The main advantage of trading using opposite Matador Resources and Rushnet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Matador Resources position performs unexpectedly, Rushnet 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 Rushnet will offset losses from the drop in Rushnet'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 |
| Rushnet vs. HPIL Holding | Rushnet vs. KYN Capital Group | Rushnet vs. Probility Media Corp | Rushnet vs. Majic Wheels 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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