Correlation Between EQT and Pioneer Natural

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

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

Diversification Opportunities for EQT and Pioneer Natural

0.0

Correlation Coefficient

EQT  Pioneer Natural

Pay attention - limited upside

The 3 months correlation between EQT and Pioneer is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding EQT Corp. and Pioneer Natural Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pioneer Natural Resources and EQT 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 EQT Corporation are associated (or correlated) with Pioneer Natural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pioneer Natural Resources has no effect on the direction of EQT i.e., EQT and Pioneer Natural go up and down completely randomly.

Pair Corralation between EQT and Pioneer Natural

If you would invest  4,419  in EQT Corporation on December 27, 2024 and sell it today you would earn a total of  873.00  from holding EQT Corporation or generate 19.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

EQT Corp.  vs.  Pioneer Natural Resources

EQT Corporation

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in EQT Corporation are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, EQT unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pioneer Natural Resources

Risk-Adjusted Performance

Very Weak

Over the last 90 days Pioneer Natural Resources has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Pioneer Natural is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with EQT and Pioneer Natural

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

The idea behind EQT Corporation and Pioneer Natural 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.