Correlation Between Matador Resources and Range Resources

Can any of the company-specific risk be diversified away by investing in both Matador Resources 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 Matador Resources and Range Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Matador Resources and Range Resources Corp, you can compare the effects of market volatilities on Matador Resources 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 Matador Resources with a short position of Range Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Matador Resources and Range Resources.

Diversification Opportunities for Matador Resources and Range Resources

0.33

Correlation Coefficient

Matador Resources  Range Resources

Weak diversification

The 3 months correlation between Matador and Range is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Matador Resources 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 Matador 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 Matador Resources 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 Matador Resources i.e., Matador Resources and Range Resources go up and down completely randomly.

Pair Corralation between Matador Resources and Range Resources

Given the investment horizon of 90 days Matador Resources is expected to generate 1.15 times more return on investment than Range Resources. However, Matador Resources is 1.15 times more volatile than Range Resources Corp. It trades about 0.14 of its potential returns per unit of risk. Range Resources Corp is currently generating about 0.02 per unit of risk. If you would invest  3,936  in Matador Resources on May 3, 2025 and sell it today you would earn a total of  846.00  from holding Matador Resources or generate 21.49% return on investment over 90 days.

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

Matador Resources  vs.  Range Resources Corp

Matador Resources

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Matador Resources are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak fundamental indicators, Matador Resources reported solid returns over the last few months and may actually be approaching a breakup point.

Range Resources Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Range Resources Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Range Resources is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Matador Resources and Range Resources

The main advantage of trading using opposite Matador Resources and Range Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Matador Resources 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 Matador Resources 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.