Correlation Between Range Resources and Civitas Resources
Can any of the company-specific risk be diversified away by investing in both Range Resources and Civitas 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 Civitas 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 Civitas Resources, you can compare the effects of market volatilities on Range Resources and Civitas 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 Civitas Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Range Resources and Civitas Resources.
Diversification Opportunities for Range Resources and Civitas Resources
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Range and Civitas is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Range Resources Corp and Civitas Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Civitas 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 Civitas Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Civitas Resources has no effect on the direction of Range Resources i.e., Range Resources and Civitas Resources go up and down completely randomly.
Pair Corralation between Range Resources and Civitas Resources
Considering the 90-day investment horizon Range Resources Corp is expected to generate 0.93 times more return on investment than Civitas Resources. However, Range Resources Corp is 1.07 times less risky than Civitas Resources. It trades about -0.02 of its potential returns per unit of risk. Civitas Resources is currently generating about -0.13 per unit of risk. If you would invest 3,710 in Range Resources Corp on September 24, 2024 and sell it today you would lose (392.00) from holding Range Resources Corp or give up 10.57% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Range Resources Corp vs. Civitas Resources
Performance |
Timeline |
Range Resources Corp |
Civitas Resources |
Range Resources and Civitas Resources Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Range Resources and Civitas Resources
The main advantage of trading using opposite Range Resources and Civitas Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Range Resources position performs unexpectedly, Civitas 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 Civitas Resources will offset losses from the drop in Civitas Resources' long position.Range Resources vs. Permianville Royalty Trust | Range Resources vs. Cross Timbers Royalty | Range Resources vs. Mesa Royalty Trust | Range Resources vs. Sabine Royalty Trust |
Civitas Resources vs. Permianville Royalty Trust | Civitas Resources vs. Cross Timbers Royalty | Civitas Resources vs. Mesa Royalty Trust | Civitas Resources vs. Sabine Royalty Trust |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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