Correlation Between Kiwetinohk Energy and Permian Resources

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

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

Diversification Opportunities for Kiwetinohk Energy and Permian Resources

0.58

Correlation Coefficient

Kiwetinohk Energy  Permian Resources

Very weak diversification

The 3 months correlation between Kiwetinohk and Permian is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Kiwetinohk Energy Corp and Permian Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Permian Resources and Kiwetinohk Energy 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 Kiwetinohk Energy Corp are associated (or correlated) with Permian Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Permian Resources has no effect on the direction of Kiwetinohk Energy i.e., Kiwetinohk Energy and Permian Resources go up and down completely randomly.

Pair Corralation between Kiwetinohk Energy and Permian Resources

Assuming the 90 days horizon Kiwetinohk Energy Corp is expected to generate 0.87 times more return on investment than Permian Resources. However, Kiwetinohk Energy Corp is 1.15 times less risky than Permian Resources. It trades about 0.05 of its potential returns per unit of risk. Permian Resources is currently generating about 0.03 per unit of risk. If you would invest  1,117  in Kiwetinohk Energy Corp on December 27, 2024 and sell it today you would earn a total of  62.00  from holding Kiwetinohk Energy Corp or generate 5.55% return on investment over 90 days.

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

Kiwetinohk Energy Corp  vs.  Permian Resources

Kiwetinohk Energy Corp

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Kiwetinohk Energy Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Kiwetinohk Energy may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Permian Resources

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Permian Resources are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Permian Resources is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Kiwetinohk Energy and Permian Resources

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

The idea behind Kiwetinohk Energy Corp and Permian 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.