Correlation Between Pantheon Resources and Permian Resources
Can any of the company-specific risk be diversified away by investing in both Pantheon Resources and Permian Resources 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 Permian Resources 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 Permian Resources, you can compare the effects of market volatilities on Pantheon Resources and Permian Resources 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 Permian Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pantheon Resources and Permian Resources.
Diversification Opportunities for Pantheon Resources and Permian Resources
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Pantheon and Permian is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Pantheon Resources Plc and Permian Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Permian Resources 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 Permian Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Permian Resources has no effect on the direction of Pantheon Resources i.e., Pantheon Resources and Permian Resources go up and down completely randomly.
Pair Corralation between Pantheon Resources and Permian Resources
Assuming the 90 days horizon Pantheon Resources Plc is expected to generate 2.59 times more return on investment than Permian Resources. However, Pantheon Resources is 2.59 times more volatile than Permian Resources. It trades about 0.06 of its potential returns per unit of risk. Permian Resources is currently generating about 0.02 per unit of risk. If you would invest 24.00 in Pantheon Resources Plc on January 13, 2025 and sell it today you would earn a total of 43.00 from holding Pantheon Resources Plc or generate 179.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pantheon Resources Plc vs. Permian Resources
Performance |
| Timeline |
| Pantheon Resources Plc |
| Permian Resources |
Pantheon Resources and Permian Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pantheon Resources and Permian Resources
The main advantage of trading using opposite Pantheon Resources and Permian Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pantheon Resources position performs unexpectedly, Permian Resources 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 Permian Resources will offset losses from the drop in Permian Resources' long position.| Pantheon Resources vs. CGX Energy | Pantheon Resources vs. Eco Oil Gas | Pantheon Resources vs. Reconnaissance Energy Africa | Pantheon Resources vs. Sintana Energy |
| Permian Resources vs. Devon Energy | Permian Resources vs. EOG Resources | Permian Resources vs. Coterra Energy | Permian Resources vs. Range Resources 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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