Correlation Between Petrus Resources and Trek Resources
Can any of the company-specific risk be diversified away by investing in both Petrus Resources and Trek 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 Petrus Resources and Trek Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Petrus Resources and Trek Resources, you can compare the effects of market volatilities on Petrus Resources and Trek 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 Petrus Resources with a short position of Trek Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Petrus Resources and Trek Resources.
Diversification Opportunities for Petrus Resources and Trek Resources
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Petrus and Trek is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Petrus Resources and Trek Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trek 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 Trek Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trek Resources has no effect on the direction of Petrus Resources i.e., Petrus Resources and Trek Resources go up and down completely randomly.
Pair Corralation between Petrus Resources and Trek Resources
Assuming the 90 days horizon Petrus Resources is expected to generate 1.09 times more return on investment than Trek Resources. However, Petrus Resources is 1.09 times more volatile than Trek Resources. It trades about 0.02 of its potential returns per unit of risk. Trek Resources is currently generating about 0.01 per unit of risk. If you would invest 87.00 in Petrus Resources on November 3, 2024 and sell it today you would earn a total of 6.00 from holding Petrus Resources or generate 6.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 98.79% |
| Values | Daily Returns |
Petrus Resources vs. Trek Resources
Performance |
| Timeline |
| Petrus Resources |
| Trek Resources |
Petrus Resources and Trek Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Petrus Resources and Trek Resources
The main advantage of trading using opposite Petrus Resources and Trek Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Petrus Resources position performs unexpectedly, Trek 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 Trek Resources will offset losses from the drop in Trek Resources' long position.| Petrus Resources vs. FAR Limited | Petrus Resources vs. Valeura Energy | Petrus Resources vs. Epsilon Energy | Petrus Resources vs. PetroShale |
| Trek Resources vs. Questerre Energy | Trek Resources vs. Petrus Resources | Trek Resources vs. PetroShale | Trek Resources vs. Pieridae Energy Limited |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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