Correlation Between Valeura Energy and Petrus Resources
Can any of the company-specific risk be diversified away by investing in both Valeura Energy 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 Valeura Energy and Petrus Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Valeura Energy and Petrus Resources, you can compare the effects of market volatilities on Valeura Energy 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 Valeura Energy with a short position of Petrus Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valeura Energy and Petrus Resources.
Diversification Opportunities for Valeura Energy and Petrus Resources
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Valeura and Petrus is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Valeura Energy and Petrus Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Petrus Resources and Valeura Energy 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 Valeura Energy 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 Valeura Energy i.e., Valeura Energy and Petrus Resources go up and down completely randomly.
Pair Corralation between Valeura Energy and Petrus Resources
Assuming the 90 days horizon Valeura Energy is expected to generate 1.52 times more return on investment than Petrus Resources. However, Valeura Energy is 1.52 times more volatile than Petrus Resources. It trades about 0.07 of its potential returns per unit of risk. Petrus Resources is currently generating about 0.05 per unit of risk. If you would invest 277.00 in Valeura Energy on September 1, 2024 and sell it today you would earn a total of 110.00 from holding Valeura Energy or generate 39.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 96.28% |
| Values | Daily Returns |
Valeura Energy vs. Petrus Resources
Performance |
| Timeline |
| Valeura Energy |
| Petrus Resources |
Valeura Energy and Petrus Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Valeura Energy and Petrus Resources
The main advantage of trading using opposite Valeura Energy and Petrus Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valeura Energy 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.| Valeura Energy vs. PepsiCo | Valeura Energy vs. Nascent Wine | Valeura Energy vs. NioCorp Developments Ltd | Valeura Energy vs. Perseus Mining Limited |
| 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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