Correlation Between PHX Minerals and North European
Can any of the company-specific risk be diversified away by investing in both PHX Minerals and North European 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 North European into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PHX Minerals and North European Oil, you can compare the effects of market volatilities on PHX Minerals and North European 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 North European. Check out your portfolio center. Please also check ongoing floating volatility patterns of PHX Minerals and North European.
Diversification Opportunities for PHX Minerals and North European
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PHX and North is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding PHX Minerals and North European Oil in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on North European Oil 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 North European. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of North European Oil has no effect on the direction of PHX Minerals i.e., PHX Minerals and North European go up and down completely randomly.
Pair Corralation between PHX Minerals and North European
Considering the 90-day investment horizon PHX Minerals is expected to generate 0.6 times more return on investment than North European. However, PHX Minerals is 1.66 times less risky than North European. It trades about 0.06 of its potential returns per unit of risk. North European Oil is currently generating about -0.12 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. North European Oil
Performance |
| Timeline |
| PHX Minerals |
| North European Oil |
PHX Minerals and North European Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PHX Minerals and North European
The main advantage of trading using opposite PHX Minerals and North European positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PHX Minerals position performs unexpectedly, North European 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 North European will offset losses from the drop in North European's long position.| PHX Minerals vs. Evolution Petroleum | PHX Minerals vs. GeoPark | PHX Minerals vs. Granite Ridge Resources | PHX Minerals vs. California Resources Corp |
| North European vs. Cross Timbers Royalty | North European vs. VOC Energy Trust | North European vs. Sabine Royalty Trust | North European vs. Permianville Royalty Trust |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
Other Complementary Tools
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance |