Correlation Between Pantheon Resources and Maverick Energy
Can any of the company-specific risk be diversified away by investing in both Pantheon Resources and Maverick Energy 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 Maverick Energy 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 Maverick Energy Group, you can compare the effects of market volatilities on Pantheon Resources and Maverick Energy 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 Maverick Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pantheon Resources and Maverick Energy.
Diversification Opportunities for Pantheon Resources and Maverick Energy
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Pantheon and Maverick is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Pantheon Resources Plc and Maverick Energy Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maverick Energy Group 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 Maverick Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maverick Energy Group has no effect on the direction of Pantheon Resources i.e., Pantheon Resources and Maverick Energy go up and down completely randomly.
Pair Corralation between Pantheon Resources and Maverick Energy
Assuming the 90 days horizon Pantheon Resources Plc is expected to generate 0.84 times more return on investment than Maverick Energy. However, Pantheon Resources Plc is 1.19 times less risky than Maverick Energy. It trades about 0.47 of its potential returns per unit of risk. Maverick Energy Group is currently generating about 0.05 per unit of risk. If you would invest 36.00 in Pantheon Resources Plc on November 3, 2024 and sell it today you would earn a total of 28.00 from holding Pantheon Resources Plc or generate 77.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Pantheon Resources Plc vs. Maverick Energy Group
Performance |
| Timeline |
| Pantheon Resources Plc |
| Maverick Energy Group |
Pantheon Resources and Maverick Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pantheon Resources and Maverick Energy
The main advantage of trading using opposite Pantheon Resources and Maverick Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pantheon Resources position performs unexpectedly, Maverick Energy 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 Maverick Energy will offset losses from the drop in Maverick Energy'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 |
| Maverick Energy vs. Gulf Keystone Petroleum | Maverick Energy vs. Falcon Oil Gas | Maverick Energy vs. North European Oil | Maverick Energy 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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