Correlation Between Petrus Resources and Pioneer Natural
Can any of the company-specific risk be diversified away by investing in both Petrus Resources and Pioneer Natural 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 Petrus Resources and Pioneer Natural into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Petrus Resources and Pioneer Natural Resources, you can compare the effects of market volatilities on Petrus Resources and Pioneer Natural 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 Petrus Resources with a short position of Pioneer Natural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petrus Resources and Pioneer Natural.
Diversification Opportunities for Petrus Resources and Pioneer Natural
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Petrus and Pioneer is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Petrus Resources and Pioneer Natural Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pioneer Natural Resources and Petrus 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 Petrus Resources are associated (or correlated) with Pioneer Natural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pioneer Natural Resources has no effect on the direction of Petrus Resources i.e., Petrus Resources and Pioneer Natural go up and down completely randomly.
Pair Corralation between Petrus Resources and Pioneer Natural
Assuming the 90 days horizon Petrus Resources is expected to under-perform the Pioneer Natural. In addition to that, Petrus Resources is 2.05 times more volatile than Pioneer Natural Resources. It trades about -0.01 of its total potential returns per unit of risk. Pioneer Natural Resources is currently generating about -0.01 per unit of volatility. If you would invest 22,905 in Pioneer Natural Resources on September 3, 2024 and sell it today you would lose (1,102) from holding Pioneer Natural Resources or give up 4.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 29.62% |
| Values | Daily Returns |
Petrus Resources vs. Pioneer Natural Resources
Performance |
| Timeline |
| Petrus Resources |
| Pioneer Natural Resources |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Petrus Resources and Pioneer Natural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Petrus Resources and Pioneer Natural
The main advantage of trading using opposite Petrus Resources and Pioneer Natural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petrus Resources position performs unexpectedly, Pioneer Natural 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 Pioneer Natural will offset losses from the drop in Pioneer Natural's long position.| Petrus Resources vs. FAR Limited | Petrus Resources vs. Valeura Energy | Petrus Resources vs. Epsilon Energy | Petrus Resources vs. PetroShale |
| Pioneer Natural vs. Coterra Energy | Pioneer Natural vs. Occidental Petroleum | Pioneer Natural vs. Diamondback Energy | Pioneer Natural vs. ConocoPhillips |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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