Correlation Between PHX Minerals and GeoPark
Can any of the company-specific risk be diversified away by investing in both PHX Minerals 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 PHX Minerals and GeoPark into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PHX Minerals and GeoPark, you can compare the effects of market volatilities on PHX Minerals 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 PHX Minerals with a short position of GeoPark. Check out your portfolio center. Please also check ongoing floating volatility patterns of PHX Minerals and GeoPark.
Diversification Opportunities for PHX Minerals and GeoPark
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between PHX and GeoPark is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding PHX Minerals and GeoPark in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GeoPark 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 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 PHX Minerals i.e., PHX Minerals and GeoPark go up and down completely randomly.
Pair Corralation between PHX Minerals and GeoPark
Considering the 90-day investment horizon PHX Minerals is expected to generate 0.77 times more return on investment than GeoPark. However, PHX Minerals is 1.3 times less risky than GeoPark. It trades about 0.06 of its potential returns per unit of risk. GeoPark is currently generating about -0.05 per unit of risk. If you would invest 332.00 in PHX Minerals on August 24, 2024 and sell it today you would earn a total of 42.00 from holding PHX Minerals or generate 12.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PHX Minerals vs. GeoPark
Performance |
| Timeline |
| PHX Minerals |
| GeoPark |
PHX Minerals and GeoPark Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PHX Minerals and GeoPark
The main advantage of trading using opposite PHX Minerals and GeoPark positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PHX Minerals 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.| PHX Minerals vs. Evolution Petroleum | PHX Minerals vs. GeoPark | PHX Minerals vs. Granite Ridge Resources | PHX Minerals vs. California Resources Corp |
| 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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