Correlation Between PEDEVCO Corp and GeoPark
Can any of the company-specific risk be diversified away by investing in both PEDEVCO Corp and GeoPark 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 PEDEVCO Corp and GeoPark into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PEDEVCO Corp and GeoPark, you can compare the effects of market volatilities on PEDEVCO Corp and GeoPark 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 PEDEVCO Corp with a short position of GeoPark. Check out your portfolio center. Please also check ongoing floating volatility patterns of PEDEVCO Corp and GeoPark.
Diversification Opportunities for PEDEVCO Corp and GeoPark
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between PEDEVCO and GeoPark is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding PEDEVCO Corp and GeoPark in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GeoPark and PEDEVCO 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 PEDEVCO Corp are associated (or correlated) with GeoPark. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GeoPark has no effect on the direction of PEDEVCO Corp i.e., PEDEVCO Corp and GeoPark go up and down completely randomly.
Pair Corralation between PEDEVCO Corp and GeoPark
Considering the 90-day investment horizon PEDEVCO Corp is expected to under-perform the GeoPark. But the stock apears to be less risky and, when comparing its historical volatility, PEDEVCO Corp is 1.84 times less risky than GeoPark. The stock trades about -0.2 of its potential returns per unit of risk. The GeoPark is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 812.00 in GeoPark on August 29, 2024 and sell it today you would earn a total of 96.00 from holding GeoPark or generate 11.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PEDEVCO Corp vs. GeoPark
Performance |
| Timeline |
| PEDEVCO Corp |
| GeoPark |
PEDEVCO Corp and GeoPark Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PEDEVCO Corp and GeoPark
The main advantage of trading using opposite PEDEVCO Corp and GeoPark positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PEDEVCO Corp position performs unexpectedly, GeoPark 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 GeoPark will offset losses from the drop in GeoPark's long position.| PEDEVCO Corp vs. Gran Tierra Energy | PEDEVCO Corp vs. Permian Resources | PEDEVCO Corp vs. PermRock Royalty Trust | PEDEVCO Corp vs. MV Oil Trust |
| GeoPark vs. Evolution Petroleum | GeoPark vs. Granite Ridge Resources | GeoPark vs. PHX Minerals | GeoPark 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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