Correlation Between PEDEVCO Corp and Mach Natural

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

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

Diversification Opportunities for PEDEVCO Corp and Mach Natural

0.68

Correlation Coefficient

PEDEVCO Corp  Mach Natural

Poor diversification

The 3 months correlation between PEDEVCO and Mach is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding PEDEVCO Corp and Mach Natural Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mach Natural Resources and PEDEVCO Corp 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 PEDEVCO Corp are associated (or correlated) with Mach Natural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mach Natural Resources has no effect on the direction of PEDEVCO Corp i.e., PEDEVCO Corp and Mach Natural go up and down completely randomly.

Pair Corralation between PEDEVCO Corp and Mach Natural

Considering the 90-day investment horizon PEDEVCO Corp is expected to under-perform the Mach Natural. In addition to that, PEDEVCO Corp is 1.69 times more volatile than Mach Natural Resources. It trades about -0.23 of its total potential returns per unit of risk. Mach Natural Resources is currently generating about 0.01 per unit of volatility. If you would invest  1,541  in Mach Natural Resources on September 16, 2024 and sell it today you would earn a total of  0.00  from holding Mach Natural Resources or generate 0.0% return on investment over 90 days.

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

PEDEVCO Corp  vs.  Mach Natural Resources

PEDEVCO Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PEDEVCO Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Mach Natural Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mach Natural Resources has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Mach Natural is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with PEDEVCO Corp and Mach Natural

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

The idea behind PEDEVCO Corp and Mach Natural Resources 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.