Correlation Between PetroShale and EQT
Can any of the company-specific risk be diversified away by investing in both PetroShale and EQT 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 PetroShale and EQT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PetroShale and EQT Corporation, you can compare the effects of market volatilities on PetroShale and EQT 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 PetroShale with a short position of EQT. Check out your portfolio center. Please also check ongoing floating volatility patterns of PetroShale and EQT.
Diversification Opportunities for PetroShale and EQT
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between PetroShale and EQT is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding PetroShale and EQT Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EQT Corporation and PetroShale 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 PetroShale are associated (or correlated) with EQT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EQT Corporation has no effect on the direction of PetroShale i.e., PetroShale and EQT go up and down completely randomly.
Pair Corralation between PetroShale and EQT
Assuming the 90 days horizon PetroShale is expected to under-perform the EQT. But the otc stock apears to be less risky and, when comparing its historical volatility, PetroShale is 1.88 times less risky than EQT. The otc stock trades about -0.21 of its potential returns per unit of risk. The EQT Corporation is currently generating about 0.4 of returns per unit of risk over similar time horizon. If you would invest 3,638 in EQT Corporation on September 1, 2024 and sell it today you would earn a total of 906.00 from holding EQT Corporation or generate 24.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PetroShale vs. EQT Corp.
Performance |
| Timeline |
| PetroShale |
| EQT Corporation |
PetroShale and EQT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PetroShale and EQT
The main advantage of trading using opposite PetroShale and EQT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PetroShale position performs unexpectedly, EQT 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 EQT will offset losses from the drop in EQT's long position.| PetroShale vs. Dno ASA | PetroShale vs. Horizon Oil Limited | PetroShale vs. Enwell Energy plc | PetroShale vs. Tullow Oil plc |
| EQT vs. Antero Resources Corp | EQT vs. Matador Resources | EQT vs. Devon Energy | EQT vs. Diamondback 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
Other Complementary Tools
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |