Correlation Between North European and Pantheon Resources
Can any of the company-specific risk be diversified away by investing in both North European and Pantheon 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 North European and Pantheon Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between North European Oil and Pantheon Resources Plc, you can compare the effects of market volatilities on North European and Pantheon 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 North European with a short position of Pantheon Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of North European and Pantheon Resources.
Diversification Opportunities for North European and Pantheon Resources
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between North and Pantheon is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding North European Oil and Pantheon Resources Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pantheon Resources Plc and North European 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 North European Oil are associated (or correlated) with Pantheon Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pantheon Resources Plc has no effect on the direction of North European i.e., North European and Pantheon Resources go up and down completely randomly.
Pair Corralation between North European and Pantheon Resources
Considering the 90-day investment horizon North European is expected to generate 59.34 times less return on investment than Pantheon Resources. But when comparing it to its historical volatility, North European Oil is 2.19 times less risky than Pantheon Resources. It trades about 0.02 of its potential returns per unit of risk. Pantheon Resources Plc is currently generating about 0.47 of returns per unit of risk over similar time horizon. If you would invest 36.00 in Pantheon Resources Plc on November 3, 2024 and sell it today you would earn a total of 28.00 from holding Pantheon Resources Plc or generate 77.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
North European Oil vs. Pantheon Resources Plc
Performance |
| Timeline |
| North European Oil |
| Pantheon Resources Plc |
North European and Pantheon Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with North European and Pantheon Resources
The main advantage of trading using opposite North European and Pantheon Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if North European position performs unexpectedly, Pantheon 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 Pantheon Resources will offset losses from the drop in Pantheon Resources' long position.| North European vs. Cross Timbers Royalty | North European vs. VOC Energy Trust | North European vs. Sabine Royalty Trust | North European vs. Permianville Royalty Trust |
| Pantheon Resources vs. CGX Energy | Pantheon Resources vs. Eco Oil Gas | Pantheon Resources vs. Reconnaissance Energy Africa | Pantheon Resources vs. Sintana Energy |
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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