Correlation Between Pioneer Natural and Baytex Energy
Can any of the company-specific risk be diversified away by investing in both Pioneer Natural and Baytex 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 Pioneer Natural and Baytex Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pioneer Natural Resources and Baytex Energy Corp, you can compare the effects of market volatilities on Pioneer Natural and Baytex 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 Pioneer Natural with a short position of Baytex Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pioneer Natural and Baytex Energy.
Diversification Opportunities for Pioneer Natural and Baytex Energy
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Pioneer and Baytex is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Pioneer Natural Resources and Baytex Energy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baytex Energy Corp and Pioneer Natural 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 Pioneer Natural Resources are associated (or correlated) with Baytex Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baytex Energy Corp has no effect on the direction of Pioneer Natural i.e., Pioneer Natural and Baytex Energy go up and down completely randomly.
Pair Corralation between Pioneer Natural and Baytex Energy
If you would invest 293.00 in Baytex Energy Corp on August 23, 2024 and sell it today you would earn a total of 9.00 from holding Baytex Energy Corp or generate 3.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 4.35% |
| Values | Daily Returns |
Pioneer Natural Resources vs. Baytex Energy Corp
Performance |
| Timeline |
| Pioneer Natural Resources |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Baytex Energy Corp |
Pioneer Natural and Baytex Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pioneer Natural and Baytex Energy
The main advantage of trading using opposite Pioneer Natural and Baytex Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pioneer Natural position performs unexpectedly, Baytex 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 Baytex Energy will offset losses from the drop in Baytex Energy's long position.| Pioneer Natural vs. Coterra Energy | Pioneer Natural vs. Occidental Petroleum | Pioneer Natural vs. Diamondback Energy | Pioneer Natural vs. ConocoPhillips |
| Baytex Energy vs. Vermilion Energy | Baytex Energy vs. Obsidian Energy | Baytex Energy vs. Canadian Natural Resources | Baytex Energy vs. Ovintiv |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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