Correlation Between Range Resources and Permian Resources
Can any of the company-specific risk be diversified away by investing in both Range Resources 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 Range Resources and Permian Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Range Resources Corp and Permian Resources, you can compare the effects of market volatilities on Range Resources 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 Range Resources with a short position of Permian Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Range Resources and Permian Resources.
Diversification Opportunities for Range Resources and Permian Resources
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Range and Permian is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Range Resources Corp and Permian Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Permian Resources and Range Resources 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 Range Resources Corp 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 Range Resources i.e., Range Resources and Permian Resources go up and down completely randomly.
Pair Corralation between Range Resources and Permian Resources
Considering the 90-day investment horizon Range Resources Corp is expected to under-perform the Permian Resources. But the stock apears to be less risky and, when comparing its historical volatility, Range Resources Corp is 1.05 times less risky than Permian Resources. The stock trades about -0.08 of its potential returns per unit of risk. The Permian Resources is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,248 in Permian Resources on May 30, 2025 and sell it today you would earn a total of 139.00 from holding Permian Resources or generate 11.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Range Resources Corp vs. Permian Resources
Performance |
| Timeline |
| Range Resources Corp |
| Permian Resources |
Range Resources and Permian Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Range Resources and Permian Resources
The main advantage of trading using opposite Range Resources and Permian Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Range Resources 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.| Range Resources vs. Expand Energy | Range Resources vs. Antero Resources Corp | Range Resources vs. EQT Corporation | Range Resources vs. Matador Resources |
| Permian Resources vs. Diamondback Energy | Permian Resources vs. Antero Resources Corp | Permian Resources vs. Vital Energy | Permian Resources vs. Magnolia Oil Gas |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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