Correlation Between Permian Resources and Gran Tierra
Can any of the company-specific risk be diversified away by investing in both Permian Resources and Gran Tierra 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 Gran Tierra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Permian Resources and Gran Tierra Energy, you can compare the effects of market volatilities on Permian Resources and Gran Tierra 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 Gran Tierra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Permian Resources and Gran Tierra.
Diversification Opportunities for Permian Resources and Gran Tierra
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Permian and Gran is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Permian Resources and Gran Tierra Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gran Tierra Energy 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 Gran Tierra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gran Tierra Energy has no effect on the direction of Permian Resources i.e., Permian Resources and Gran Tierra go up and down completely randomly.
Pair Corralation between Permian Resources and Gran Tierra
Allowing for the 90-day total investment horizon Permian Resources is expected to generate 0.73 times more return on investment than Gran Tierra. However, Permian Resources is 1.38 times less risky than Gran Tierra. It trades about 0.38 of its potential returns per unit of risk. Gran Tierra Energy is currently generating about -0.05 per unit of risk. If you would invest 1,348 in Permian Resources on August 28, 2024 and sell it today you would earn a total of 220.00 from holding Permian Resources or generate 16.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Permian Resources vs. Gran Tierra Energy
Performance |
| Timeline |
| Permian Resources |
| Gran Tierra Energy |
Permian Resources and Gran Tierra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Permian Resources and Gran Tierra
The main advantage of trading using opposite Permian Resources and Gran Tierra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Permian Resources position performs unexpectedly, Gran Tierra 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 Gran Tierra will offset losses from the drop in Gran Tierra's long position.| Permian Resources vs. Devon Energy | Permian Resources vs. ConocoPhillips | Permian Resources vs. Occidental Petroleum | Permian Resources vs. EOG Resources |
| Gran Tierra vs. Permian Resources | Gran Tierra vs. PEDEVCO Corp | Gran Tierra vs. Vermilion Energy | Gran Tierra vs. Ovintiv |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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. | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges |