Correlation Between Pioneer Natural and ATLANTIC PETROLPF

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

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

Diversification Opportunities for Pioneer Natural and ATLANTIC PETROLPF

-0.15

Correlation Coefficient

Pioneer Natural  ATLANTIC PETROLPF

Good diversification

The 3 months correlation between Pioneer and ATLANTIC is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Pioneer Natural Resources and ATLANTIC PETROLPF DK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATLANTIC PETROLPF and Pioneer Natural 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 Pioneer Natural Resources are associated (or correlated) with ATLANTIC PETROLPF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATLANTIC PETROLPF has no effect on the direction of Pioneer Natural i.e., Pioneer Natural and ATLANTIC PETROLPF go up and down completely randomly.

Pair Corralation between Pioneer Natural and ATLANTIC PETROLPF

Assuming the 90 days horizon Pioneer Natural Resources is expected to under-perform the ATLANTIC PETROLPF. In addition to that, Pioneer Natural is 1.53 times more volatile than ATLANTIC PETROLPF DK. It trades about -0.08 of its total potential returns per unit of risk. ATLANTIC PETROLPF DK is currently generating about 0.09 per unit of volatility. If you would invest  16.00  in ATLANTIC PETROLPF DK on December 30, 2024 and sell it today you would earn a total of  5.00  from holding ATLANTIC PETROLPF DK or generate 31.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	79.69%
Values	Daily Returns

Pioneer Natural Resources  vs.  ATLANTIC PETROLPF DK

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. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

ATLANTIC PETROLPF

Risk-Adjusted Performance

OK

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

Pair Trading with Pioneer Natural and ATLANTIC PETROLPF

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

The idea behind Pioneer Natural Resources and ATLANTIC PETROLPF DK 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.