Correlation Between Expand Energy and Permian Resources
Can any of the company-specific risk be diversified away by investing in both Expand Energy and Permian 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 Expand Energy and Permian Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Expand Energy and Permian Resources, you can compare the effects of market volatilities on Expand Energy and Permian 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 Expand Energy with a short position of Permian Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Expand Energy and Permian Resources.
Diversification Opportunities for Expand Energy and Permian Resources
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Expand and Permian is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Expand Energy and Permian Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Permian Resources and Expand 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 Expand Energy are associated (or correlated) with Permian Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Permian Resources has no effect on the direction of Expand Energy i.e., Expand Energy and Permian Resources go up and down completely randomly.
Pair Corralation between Expand Energy and Permian Resources
Considering the 90-day investment horizon Expand Energy is expected to generate 0.51 times more return on investment than Permian Resources. However, Expand Energy is 1.95 times less risky than Permian Resources. It trades about 0.06 of its potential returns per unit of risk. Permian Resources is currently generating about 0.02 per unit of risk. If you would invest 11,076 in Expand Energy on March 30, 2025 and sell it today you would earn a total of 820.00 from holding Expand Energy or generate 7.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Expand Energy vs. Permian Resources
Performance |
| Timeline |
| Expand Energy |
| Permian Resources |
Expand Energy and Permian Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Expand Energy and Permian Resources
The main advantage of trading using opposite Expand Energy and Permian Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Expand Energy position performs unexpectedly, Permian 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 Permian Resources will offset losses from the drop in Permian Resources' long position.| Expand Energy vs. Life360, Common Stock | Expand Energy vs. Mink Therapeutics | Expand Energy vs. Dyadic International | Expand Energy vs. Sapiens International |
| Permian Resources vs. Devon Energy | Permian Resources vs. EOG Resources | Permian Resources vs. Coterra Energy | Permian Resources vs. Range Resources Corp |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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