Correlation Between QEM and Range Resources
Can any of the company-specific risk be diversified away by investing in both QEM and Range 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 QEM and Range Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between QEM and Range Resources Corp, you can compare the effects of market volatilities on QEM and Range 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 QEM with a short position of Range Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of QEM and Range Resources.
Diversification Opportunities for QEM and Range Resources
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between QEM and Range is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding QEM and Range Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Range Resources Corp and QEM 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 QEM are associated (or correlated) with Range Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Range Resources Corp has no effect on the direction of QEM i.e., QEM and Range Resources go up and down completely randomly.
Pair Corralation between QEM and Range Resources
Assuming the 90 days trading horizon QEM is expected to under-perform the Range Resources. In addition to that, QEM is 3.33 times more volatile than Range Resources Corp. It trades about -0.13 of its total potential returns per unit of risk. Range Resources Corp is currently generating about 0.11 per unit of volatility. If you would invest 3,331 in Range Resources Corp on August 25, 2025 and sell it today you would earn a total of 477.00 from holding Range Resources Corp or generate 14.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.48% |
| Values | Daily Returns |
QEM vs. Range Resources Corp
Performance |
| Timeline |
| QEM |
| Range Resources Corp |
QEM and Range Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with QEM and Range Resources
The main advantage of trading using opposite QEM and Range Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if QEM position performs unexpectedly, Range 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 Range Resources will offset losses from the drop in Range Resources' long position.The idea behind QEM and Range Resources Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Range Resources vs. Permian Resources | Range Resources vs. Ovintiv | Range Resources vs. APA Corporation | Range Resources vs. Antero 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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