Correlation Between Pantheon Resources and Imperial Res

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

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

Diversification Opportunities for Pantheon Resources and Imperial Res

0.0

Correlation Coefficient

Pantheon Resources  Imperial Res

Pay attention - limited upside

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

Pair Corralation between Pantheon Resources and Imperial Res

If you would invest  31.00  in Pantheon Resources Plc on December 2, 2024 and sell it today you would earn a total of  44.00  from holding Pantheon Resources Plc or generate 141.94% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	96.83%
Values	Daily Returns

Pantheon Resources Plc  vs.  Imperial Res

Pantheon Resources Plc

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Pantheon Resources Plc are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Pantheon Resources reported solid returns over the last few months and may actually be approaching a breakup point.

Imperial Res

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Pantheon Resources and Imperial Res

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

The idea behind Pantheon Resources Plc and Imperial Res 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.

Check out your portfolio center.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.