Correlation Between Big Lots and Range Resources
Can any of the company-specific risk be diversified away by investing in both Big Lots and Range Resources 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 Big Lots and Range Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Big Lots and Range Resources Corp, you can compare the effects of market volatilities on Big Lots and Range Resources 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 Big Lots with a short position of Range Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Big Lots and Range Resources.
Diversification Opportunities for Big Lots and Range Resources
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Big and Range is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Big Lots and Range Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Range Resources Corp and Big Lots 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 Big Lots are associated (or correlated) with Range Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Range Resources Corp has no effect on the direction of Big Lots i.e., Big Lots and Range Resources go up and down completely randomly.
Pair Corralation between Big Lots and Range Resources
Considering the 90-day investment horizon Big Lots is expected to under-perform the Range Resources. In addition to that, Big Lots is 4.49 times more volatile than Range Resources Corp. It trades about -0.07 of its total potential returns per unit of risk. Range Resources Corp is currently generating about 0.21 per unit of volatility. If you would invest 3,288 in Range Resources Corp on January 20, 2024 and sell it today you would earn a total of 190.00 from holding Range Resources Corp or generate 5.78% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Big Lots vs. Range Resources Corp
Performance |
Timeline |
Big Lots |
Range Resources Corp |
Big Lots and Range Resources Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Big Lots and Range Resources
The main advantage of trading using opposite Big Lots and Range Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Big Lots position performs unexpectedly, Range Resources 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 Range Resources will offset losses from the drop in Range Resources' long position.Big Lots vs. BJs Wholesale Club | Big Lots vs. Dollar General | Big Lots vs. Costco Wholesale Corp | Big Lots vs. Walmart |
Range Resources vs. Chesapeake Energy Corp | Range Resources vs. Antero Resources Corp | Range Resources vs. EQT Corporation | Range Resources vs. Comstock Resources |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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