Correlation Between Pantheon Resources and Falcon Oil
Can any of the company-specific risk be diversified away by investing in both Pantheon Resources and Falcon Oil 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 Pantheon Resources and Falcon Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pantheon Resources Plc and Falcon Oil Gas, you can compare the effects of market volatilities on Pantheon Resources and Falcon Oil 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 Pantheon Resources with a short position of Falcon Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pantheon Resources and Falcon Oil.
Diversification Opportunities for Pantheon Resources and Falcon Oil
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Pantheon and Falcon is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Pantheon Resources Plc and Falcon Oil Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Falcon Oil Gas and Pantheon 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 Pantheon Resources Plc are associated (or correlated) with Falcon Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Falcon Oil Gas has no effect on the direction of Pantheon Resources i.e., Pantheon Resources and Falcon Oil go up and down completely randomly.
Pair Corralation between Pantheon Resources and Falcon Oil
Assuming the 90 days horizon Pantheon Resources is expected to generate 2.06 times less return on investment than Falcon Oil. But when comparing it to its historical volatility, Pantheon Resources Plc is 2.56 times less risky than Falcon Oil. It trades about 0.43 of its potential returns per unit of risk. Falcon Oil Gas is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 5.08 in Falcon Oil Gas on October 23, 2024 and sell it today you would earn a total of 3.92 from holding Falcon Oil Gas or generate 77.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pantheon Resources Plc vs. Falcon Oil Gas
Performance |
| Timeline |
| Pantheon Resources Plc |
| Falcon Oil Gas |
Pantheon Resources and Falcon Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pantheon Resources and Falcon Oil
The main advantage of trading using opposite Pantheon Resources and Falcon Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pantheon Resources position performs unexpectedly, Falcon Oil 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 Falcon Oil will offset losses from the drop in Falcon Oil's long position.| Pantheon Resources vs. CGX Energy | Pantheon Resources vs. Eco Oil Gas | Pantheon Resources vs. Reconnaissance Energy Africa | Pantheon Resources vs. Sintana Energy |
| Falcon Oil vs. Gulf Keystone Petroleum | Falcon Oil vs. Maverick Energy Group | Falcon Oil vs. North European Oil | Falcon Oil vs. SandRidge 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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