Correlation Between Permian Resources and EnQuest PLC
Can any of the company-specific risk be diversified away by investing in both Permian Resources and EnQuest PLC 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 Permian Resources and EnQuest PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Permian Resources and EnQuest PLC, you can compare the effects of market volatilities on Permian Resources and EnQuest PLC 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 Permian Resources with a short position of EnQuest PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Permian Resources and EnQuest PLC.
Diversification Opportunities for Permian Resources and EnQuest PLC
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Permian and EnQuest is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Permian Resources and EnQuest PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EnQuest PLC and Permian Resources 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 Permian Resources are associated (or correlated) with EnQuest PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EnQuest PLC has no effect on the direction of Permian Resources i.e., Permian Resources and EnQuest PLC go up and down completely randomly.
Pair Corralation between Permian Resources and EnQuest PLC
Allowing for the 90-day total investment horizon Permian Resources is expected to generate 0.41 times more return on investment than EnQuest PLC. However, Permian Resources is 2.47 times less risky than EnQuest PLC. It trades about 0.36 of its potential returns per unit of risk. EnQuest PLC is currently generating about 0.02 per unit of risk. If you would invest 1,341 in Permian Resources on August 30, 2024 and sell it today you would earn a total of 218.00 from holding Permian Resources or generate 16.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Permian Resources vs. EnQuest PLC
Performance |
| Timeline |
| Permian Resources |
| EnQuest PLC |
Permian Resources and EnQuest PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Permian Resources and EnQuest PLC
The main advantage of trading using opposite Permian Resources and EnQuest PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Permian Resources position performs unexpectedly, EnQuest PLC 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 EnQuest PLC will offset losses from the drop in EnQuest PLC's long position.| Permian Resources vs. Devon Energy | Permian Resources vs. EOG Resources | Permian Resources vs. Coterra Energy | Permian Resources vs. Range Resources Corp |
| EnQuest PLC vs. Permian Resources | EnQuest PLC vs. Devon Energy | EnQuest PLC vs. EOG Resources | EnQuest PLC vs. Coterra 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 CEOs Directory module to screen CEOs from public companies around the world.
Other Complementary Tools
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites |