Correlation Between Permian Resources and Vivakor

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

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

Diversification Opportunities for Permian Resources and Vivakor

-0.67

Correlation Coefficient

Permian Resources  Vivakor

Excellent diversification

The 3 months correlation between Permian and Vivakor is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Permian Resources and Vivakor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vivakor and Permian 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 Permian Resources are associated (or correlated) with Vivakor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vivakor has no effect on the direction of Permian Resources i.e., Permian Resources and Vivakor go up and down completely randomly.

Pair Corralation between Permian Resources and Vivakor

Allowing for the 90-day total investment horizon Permian Resources is expected to generate 0.34 times more return on investment than Vivakor. However, Permian Resources is 2.92 times less risky than Vivakor. It trades about 0.12 of its potential returns per unit of risk. Vivakor is currently generating about 0.02 per unit of risk. If you would invest  972.00  in Permian Resources on January 20, 2024 and sell it today you would earn a total of  746.00  from holding Permian Resources or generate 76.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Permian Resources  vs.  Vivakor

Permian Resources

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Permian Resources are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, Permian Resources reported solid returns over the last few months and may actually be approaching a breakup point.

Vivakor

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Vivakor are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, Vivakor may actually be approaching a critical reversion point that can send shares even higher in May 2024.

Pair Trading with Permian Resources and Vivakor

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

The idea behind Permian Resources and Vivakor 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.