Correlation Between Expand Energy and Range Resources

Can any of the company-specific risk be diversified away by investing in both Expand Energy 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 Expand Energy and Range 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 Range Resources Corp, you can compare the effects of market volatilities on Expand Energy 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 Expand Energy with a short position of Range Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Expand Energy and Range Resources.

Diversification Opportunities for Expand Energy and Range Resources

0.87

Correlation Coefficient

Expand Energy  Range Resources

Very poor diversification

The 3 months correlation between Expand and Range is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Expand Energy 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 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 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 Expand Energy i.e., Expand Energy and Range Resources go up and down completely randomly.

Pair Corralation between Expand Energy and Range Resources

Considering the 90-day investment horizon Expand Energy is expected to generate 0.96 times more return on investment than Range Resources. However, Expand Energy is 1.05 times less risky than Range Resources. It trades about -0.08 of its potential returns per unit of risk. Range Resources Corp is currently generating about -0.08 per unit of risk. If you would invest  11,036  in Expand Energy on May 12, 2025 and sell it today you would lose (1,122) from holding Expand Energy or give up 10.17% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Expand Energy  vs.  Range Resources Corp

Expand Energy

Risk-Adjusted Performance

Weakest

Over the last 90 days Expand Energy has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Range Resources Corp

Risk-Adjusted Performance

Weakest

Over the last 90 days Range Resources Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Expand Energy and Range Resources

The main advantage of trading using opposite Expand Energy and Range Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Expand Energy 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 Expand Energy 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.

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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.