Correlation Between NuVista Energy and Petrus Resources
Can any of the company-specific risk be diversified away by investing in both NuVista Energy and Petrus 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 NuVista Energy and Petrus Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NuVista Energy and Petrus Resources, you can compare the effects of market volatilities on NuVista Energy and Petrus 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 NuVista Energy with a short position of Petrus Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of NuVista Energy and Petrus Resources.
Diversification Opportunities for NuVista Energy and Petrus Resources
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between NuVista and Petrus is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding NuVista Energy and Petrus Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Petrus Resources and NuVista Energy 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 NuVista Energy are associated (or correlated) with Petrus Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Petrus Resources has no effect on the direction of NuVista Energy i.e., NuVista Energy and Petrus Resources go up and down completely randomly.
Pair Corralation between NuVista Energy and Petrus Resources
Assuming the 90 days horizon NuVista Energy is expected to generate 1.33 times more return on investment than Petrus Resources. However, NuVista Energy is 1.33 times more volatile than Petrus Resources. It trades about 0.01 of its potential returns per unit of risk. Petrus Resources is currently generating about -0.25 per unit of risk. If you would invest 940.00 in NuVista Energy on September 18, 2024 and sell it today you would lose (1.00) from holding NuVista Energy or give up 0.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
NuVista Energy vs. Petrus Resources
Performance |
| Timeline |
| NuVista Energy |
| Petrus Resources |
NuVista Energy and Petrus Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NuVista Energy and Petrus Resources
The main advantage of trading using opposite NuVista Energy and Petrus Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NuVista Energy position performs unexpectedly, Petrus 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 Petrus Resources will offset losses from the drop in Petrus Resources' long position.| NuVista Energy vs. POSCO Holdings | NuVista Energy vs. Schweizerische Nationalbank | NuVista Energy vs. Berkshire Hathaway | NuVista Energy vs. Berkshire Hathaway |
| Petrus Resources vs. POSCO Holdings | Petrus Resources vs. Schweizerische Nationalbank | Petrus Resources vs. Berkshire Hathaway | Petrus Resources vs. Berkshire Hathaway |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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