Correlation Between PEDEVCO Corp and Expand Energy

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

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

Diversification Opportunities for PEDEVCO Corp and Expand Energy

0.37

Correlation Coefficient

PEDEVCO Corp  Expand Energy

Weak diversification

The 3 months correlation between PEDEVCO and Expand is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding PEDEVCO Corp and Expand Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Expand Energy and PEDEVCO Corp 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 PEDEVCO Corp are associated (or correlated) with Expand Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Expand Energy has no effect on the direction of PEDEVCO Corp i.e., PEDEVCO Corp and Expand Energy go up and down completely randomly.

Pair Corralation between PEDEVCO Corp and Expand Energy

Considering the 90-day investment horizon PEDEVCO Corp is expected to under-perform the Expand Energy. In addition to that, PEDEVCO Corp is 1.95 times more volatile than Expand Energy. It trades about -0.02 of its total potential returns per unit of risk. Expand Energy is currently generating about 0.01 per unit of volatility. If you would invest  9,308  in Expand Energy on December 7, 2024 and sell it today you would earn a total of  37.00  from holding Expand Energy or generate 0.4% return on investment over 90 days.

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

PEDEVCO Corp  vs.  Expand Energy

PEDEVCO Corp

Risk-Adjusted Performance

Very Weak

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

Expand Energy

Risk-Adjusted Performance

Weak

Over the last 90 days Expand Energy has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable technical and fundamental indicators, Expand Energy is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with PEDEVCO Corp and Expand Energy

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

The idea behind PEDEVCO Corp and Expand Energy 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.