Correlation Between Pioneer Natural and Petrus Resources
Can any of the company-specific risk be diversified away by investing in both Pioneer Natural and Petrus 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 Pioneer Natural and Petrus Resources 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 Petrus Resources, you can compare the effects of market volatilities on Pioneer Natural and Petrus 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 Pioneer Natural with a short position of Petrus Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pioneer Natural and Petrus Resources.
Diversification Opportunities for Pioneer Natural and Petrus Resources
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Pioneer and Petrus is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Pioneer Natural Resources and Petrus Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Petrus Resources 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 Petrus Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Petrus Resources has no effect on the direction of Pioneer Natural i.e., Pioneer Natural and Petrus Resources go up and down completely randomly.
Pair Corralation between Pioneer Natural and Petrus Resources
Considering the 90-day investment horizon Pioneer Natural Resources is expected to generate 0.49 times more return on investment than Petrus Resources. However, Pioneer Natural Resources is 2.05 times less risky than Petrus Resources. It trades about -0.01 of its potential returns per unit of risk. Petrus Resources is currently generating about -0.01 per unit of risk. 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 |
Pioneer Natural Resources vs. Petrus Resources
Performance |
| Timeline |
| Pioneer Natural Resources |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Petrus Resources |
Pioneer Natural and Petrus Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pioneer Natural and Petrus Resources
The main advantage of trading using opposite Pioneer Natural and Petrus Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pioneer Natural position performs unexpectedly, Petrus 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 Petrus Resources will offset losses from the drop in Petrus Resources' long position.| Pioneer Natural vs. Coterra Energy | Pioneer Natural vs. Occidental Petroleum | Pioneer Natural vs. Diamondback Energy | Pioneer Natural vs. ConocoPhillips |
| Petrus Resources vs. FAR Limited | Petrus Resources vs. Valeura Energy | Petrus Resources vs. Epsilon Energy | Petrus Resources vs. PetroShale |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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