Correlation Between Tejon Ranch and Pardee Resources
Can any of the company-specific risk be diversified away by investing in both Tejon Ranch and Pardee 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 Tejon Ranch and Pardee Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tejon Ranch Co and Pardee Resources Co, you can compare the effects of market volatilities on Tejon Ranch and Pardee 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 Tejon Ranch with a short position of Pardee Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tejon Ranch and Pardee Resources.
Diversification Opportunities for Tejon Ranch and Pardee Resources
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Tejon and Pardee is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Tejon Ranch Co and Pardee Resources Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pardee Resources and Tejon Ranch 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 Tejon Ranch Co are associated (or correlated) with Pardee Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pardee Resources has no effect on the direction of Tejon Ranch i.e., Tejon Ranch and Pardee Resources go up and down completely randomly.
Pair Corralation between Tejon Ranch and Pardee Resources
Considering the 90-day investment horizon Tejon Ranch Co is expected to under-perform the Pardee Resources. In addition to that, Tejon Ranch is 1.38 times more volatile than Pardee Resources Co. It trades about -0.04 of its total potential returns per unit of risk. Pardee Resources Co is currently generating about 0.12 per unit of volatility. If you would invest 25,474 in Pardee Resources Co on August 29, 2024 and sell it today you would earn a total of 5,526 from holding Pardee Resources Co or generate 21.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Tejon Ranch Co vs. Pardee Resources Co
Performance |
| Timeline |
| Tejon Ranch |
| Pardee Resources |
Tejon Ranch and Pardee Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tejon Ranch and Pardee Resources
The main advantage of trading using opposite Tejon Ranch and Pardee Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tejon Ranch position performs unexpectedly, Pardee 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 Pardee Resources will offset losses from the drop in Pardee Resources' long position.| Tejon Ranch vs. Steel Partners Holdings | Tejon Ranch vs. Compass Diversified | Tejon Ranch vs. Brookfield Business Partners | Tejon Ranch vs. Matthews International |
| Pardee Resources vs. Expro Group Holdings | Pardee Resources vs. ChampionX | Pardee Resources vs. Ranger Energy Services | Pardee Resources vs. Cactus Inc |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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