Correlation Between PHX Minerals and EQT
Can any of the company-specific risk be diversified away by investing in both PHX Minerals and EQT 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 PHX Minerals and EQT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PHX Minerals and EQT Corporation, you can compare the effects of market volatilities on PHX Minerals and EQT 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 PHX Minerals with a short position of EQT. Check out your portfolio center. Please also check ongoing floating volatility patterns of PHX Minerals and EQT.
Diversification Opportunities for PHX Minerals and EQT
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between PHX and EQT is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding PHX Minerals and EQT Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EQT Corporation and PHX Minerals 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 PHX Minerals are associated (or correlated) with EQT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EQT Corporation has no effect on the direction of PHX Minerals i.e., PHX Minerals and EQT go up and down completely randomly.
Pair Corralation between PHX Minerals and EQT
Considering the 90-day investment horizon PHX Minerals is expected to generate 3.13 times less return on investment than EQT. In addition to that, PHX Minerals is 1.06 times more volatile than EQT Corporation. It trades about 0.12 of its total potential returns per unit of risk. EQT Corporation is currently generating about 0.4 per unit of volatility. If you would invest 3,638 in EQT Corporation on September 1, 2024 and sell it today you would earn a total of 906.00 from holding EQT Corporation or generate 24.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PHX Minerals vs. EQT Corp.
Performance |
| Timeline |
| PHX Minerals |
| EQT Corporation |
PHX Minerals and EQT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PHX Minerals and EQT
The main advantage of trading using opposite PHX Minerals and EQT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PHX Minerals position performs unexpectedly, EQT 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 EQT will offset losses from the drop in EQT's long position.| PHX Minerals vs. Evolution Petroleum | PHX Minerals vs. GeoPark | PHX Minerals vs. Granite Ridge Resources | PHX Minerals vs. California Resources Corp |
| EQT vs. Antero Resources Corp | EQT vs. Matador Resources | EQT vs. Devon Energy | EQT vs. Diamondback 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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