Correlation Between Range Resources and West Canyon

Can any of the company-specific risk be diversified away by investing in both Range Resources and West Canyon 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 West Canyon 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 West Canyon Energy, you can compare the effects of market volatilities on Range Resources and West Canyon 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 West Canyon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Range Resources and West Canyon.

Diversification Opportunities for Range Resources and West Canyon

0.0

Correlation Coefficient

Range Resources  West Canyon

Pay attention - limited upside

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

Pair Corralation between Range Resources and West Canyon

If you would invest  3,442  in Range Resources Corp on October 6, 2024 and sell it today you would earn a total of  163.00  from holding Range Resources Corp or generate 4.74% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Range Resources Corp  vs.  West Canyon Energy

Range Resources Corp

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Range Resources Corp are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather conflicting basic indicators, Range Resources exhibited solid returns over the last few months and may actually be approaching a breakup point.

West Canyon Energy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days West Canyon Energy has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, West Canyon is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Range Resources and West Canyon

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

The idea behind Range Resources Corp and West Canyon 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.