Correlation Between Huntsman Exploration and Pan Global

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

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

Diversification Opportunities for Huntsman Exploration and Pan Global

0.27

Correlation Coefficient

Huntsman Exploration  Pan Global

Modest diversification

The 3 months correlation between Huntsman and Pan is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Huntsman Exploration and Pan Global Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pan Global Resources and Huntsman Exploration 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 Huntsman Exploration are associated (or correlated) with Pan Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pan Global Resources has no effect on the direction of Huntsman Exploration i.e., Huntsman Exploration and Pan Global go up and down completely randomly.

Pair Corralation between Huntsman Exploration and Pan Global

Assuming the 90 days horizon Huntsman Exploration is expected to generate 2.27 times more return on investment than Pan Global. However, Huntsman Exploration is 2.27 times more volatile than Pan Global Resources. It trades about 0.1 of its potential returns per unit of risk. Pan Global Resources is currently generating about 0.07 per unit of risk. If you would invest  2.60  in Huntsman Exploration on December 29, 2024 and sell it today you would earn a total of  1.20  from holding Huntsman Exploration or generate 46.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

Huntsman Exploration  vs.  Pan Global Resources

Huntsman Exploration

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Huntsman Exploration are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile primary indicators, Huntsman Exploration reported solid returns over the last few months and may actually be approaching a breakup point.

Pan Global Resources

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Pan Global Resources are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating technical and fundamental indicators, Pan Global reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Huntsman Exploration and Pan Global

The main advantage of trading using opposite Huntsman Exploration and Pan Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huntsman Exploration position performs unexpectedly, Pan Global 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 Pan Global will offset losses from the drop in Pan Global's long position.

The idea behind Huntsman Exploration and Pan Global Resources 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.