Correlation Between Permian Resources and Petro Viking
Can any of the company-specific risk be diversified away by investing in both Permian Resources and Petro Viking 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 Petro Viking into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Permian Resources and Petro Viking Energy, you can compare the effects of market volatilities on Permian Resources and Petro Viking 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 Petro Viking. Check out your portfolio center. Please also check ongoing floating volatility patterns of Permian Resources and Petro Viking.
Diversification Opportunities for Permian Resources and Petro Viking
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Permian and Petro is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Permian Resources and Petro Viking Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Petro Viking 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 Petro Viking. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Petro Viking Energy has no effect on the direction of Permian Resources i.e., Permian Resources and Petro Viking go up and down completely randomly.
Pair Corralation between Permian Resources and Petro Viking
Allowing for the 90-day total investment horizon Permian Resources is expected to generate 36.76 times less return on investment than Petro Viking. But when comparing it to its historical volatility, Permian Resources is 25.6 times less risky than Petro Viking. It trades about 0.06 of its potential returns per unit of risk. Petro Viking Energy is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 22.00 in Petro Viking Energy on September 3, 2024 and sell it today you would lose (21.87) from holding Petro Viking Energy or give up 99.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Permian Resources vs. Petro Viking Energy
Performance |
| Timeline |
| Permian Resources |
| Petro Viking Energy |
Permian Resources and Petro Viking Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Permian Resources and Petro Viking
The main advantage of trading using opposite Permian Resources and Petro Viking positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Permian Resources position performs unexpectedly, Petro Viking 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 Petro Viking will offset losses from the drop in Petro Viking's long position.| Permian Resources vs. Devon Energy | Permian Resources vs. EOG Resources | Permian Resources vs. Coterra Energy | Permian Resources vs. Range Resources Corp |
| Petro Viking vs. Otto Energy Limited | Petro Viking vs. Foothills Exploration | Petro Viking vs. MMEX Resources Corp | Petro Viking vs. 1st NRG 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 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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