Correlation Between Range Resources and Klépierre

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

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

Diversification Opportunities for Range Resources and Klépierre

-0.15

Correlation Coefficient

Range Resources  Klépierre

Good diversification

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

Pair Corralation between Range Resources and Klépierre

Assuming the 90 days horizon Range Resources Corp is expected to under-perform the Klépierre. In addition to that, Range Resources is 1.3 times more volatile than Klpierre SA. It trades about -0.03 of its total potential returns per unit of risk. Klpierre SA is currently generating about 0.21 per unit of volatility. If you would invest  2,706  in Klpierre SA on December 29, 2024 and sell it today you would earn a total of  390.00  from holding Klpierre SA or generate 14.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Range Resources Corp  vs.  Klpierre SA

Range Resources Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Range Resources Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Range Resources is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Klpierre SA

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Klpierre SA are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Klépierre reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Range Resources and Klépierre

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

The idea behind Range Resources Corp and Klpierre SA 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.