Correlation Between Nextdecade Corp and PHX Minerals
Can any of the company-specific risk be diversified away by investing in both Nextdecade Corp and PHX Minerals 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 Nextdecade Corp and PHX Minerals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nextdecade Corp and PHX Minerals, you can compare the effects of market volatilities on Nextdecade Corp and PHX Minerals 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 Nextdecade Corp with a short position of PHX Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nextdecade Corp and PHX Minerals.
Diversification Opportunities for Nextdecade Corp and PHX Minerals
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Nextdecade and PHX is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Nextdecade Corp and PHX Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PHX Minerals and Nextdecade Corp 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 Nextdecade Corp are associated (or correlated) with PHX Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PHX Minerals has no effect on the direction of Nextdecade Corp i.e., Nextdecade Corp and PHX Minerals go up and down completely randomly.
Pair Corralation between Nextdecade Corp and PHX Minerals
Given the investment horizon of 90 days Nextdecade Corp is expected to generate 1.56 times more return on investment than PHX Minerals. However, Nextdecade Corp is 1.56 times more volatile than PHX Minerals. It trades about 0.24 of its potential returns per unit of risk. PHX Minerals is currently generating about 0.12 per unit of risk. If you would invest 584.00 in Nextdecade Corp on September 1, 2024 and sell it today you would earn a total of 140.00 from holding Nextdecade Corp or generate 23.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nextdecade Corp vs. PHX Minerals
Performance |
| Timeline |
| Nextdecade Corp |
| PHX Minerals |
Nextdecade Corp and PHX Minerals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nextdecade Corp and PHX Minerals
The main advantage of trading using opposite Nextdecade Corp and PHX Minerals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nextdecade Corp position performs unexpectedly, PHX Minerals 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 PHX Minerals will offset losses from the drop in PHX Minerals' long position.| Nextdecade Corp vs. EQT Corporation | Nextdecade Corp vs. Coterra Energy | Nextdecade Corp vs. Antero Resources Corp | Nextdecade Corp vs. Evolution Petroleum |
| PHX Minerals vs. Evolution Petroleum | PHX Minerals vs. GeoPark | PHX Minerals vs. Granite Ridge Resources | PHX Minerals vs. California Resources 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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