Correlation Between EON Resources and Highpeak Energy

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

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

Diversification Opportunities for EON Resources and Highpeak Energy

-0.09

Correlation Coefficient

EON Resources  Highpeak Energy

Good diversification

The 3 months correlation between EON and Highpeak is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding EON Resources and Highpeak Energy Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Highpeak Energy Acqu and EON 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 EON Resources are associated (or correlated) with Highpeak Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Highpeak Energy Acqu has no effect on the direction of EON Resources i.e., EON Resources and Highpeak Energy go up and down completely randomly.

Pair Corralation between EON Resources and Highpeak Energy

Given the investment horizon of 90 days EON Resources is expected to under-perform the Highpeak Energy. In addition to that, EON Resources is 3.16 times more volatile than Highpeak Energy Acquisition. It trades about -0.01 of its total potential returns per unit of risk. Highpeak Energy Acquisition is currently generating about -0.02 per unit of volatility. If you would invest  2,511  in Highpeak Energy Acquisition on October 10, 2024 and sell it today you would lose (1,073) from holding Highpeak Energy Acquisition or give up 42.73% of portfolio value over 90 days.

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

EON Resources  vs.  Highpeak Energy Acquisition

EON Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days EON Resources has generated negative risk-adjusted returns adding no value to investors with long positions. Even with conflicting performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Highpeak Energy Acqu

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Highpeak Energy Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Highpeak Energy is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with EON Resources and Highpeak Energy

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

The idea behind EON Resources and Highpeak Energy Acquisition 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.