Correlation Between Pioneer Natural and TRAVEL +

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

By analyzing existing cross correlation between Pioneer Natural Resources and TRAVEL LEISURE DL 01, you can compare the effects of market volatilities on Pioneer Natural and TRAVEL + 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 Pioneer Natural with a short position of TRAVEL +. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pioneer Natural and TRAVEL +.

Diversification Opportunities for Pioneer Natural and TRAVEL +

0.52

Correlation Coefficient

Pioneer Natural  TRAVEL +

Very weak diversification

The 3 months correlation between Pioneer and TRAVEL is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Pioneer Natural Resources and TRAVEL LEISURE DL 01 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TRAVEL LEISURE DL and Pioneer Natural 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 Pioneer Natural Resources are associated (or correlated) with TRAVEL +. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TRAVEL LEISURE DL has no effect on the direction of Pioneer Natural i.e., Pioneer Natural and TRAVEL + go up and down completely randomly.

Pair Corralation between Pioneer Natural and TRAVEL +

Assuming the 90 days horizon Pioneer Natural Resources is expected to generate 3.96 times more return on investment than TRAVEL +. However, Pioneer Natural is 3.96 times more volatile than TRAVEL LEISURE DL 01. It trades about 0.11 of its potential returns per unit of risk. TRAVEL LEISURE DL 01 is currently generating about 0.29 per unit of risk. If you would invest  20.00  in Pioneer Natural Resources on April 20, 2025 and sell it today you would earn a total of  7.00  from holding Pioneer Natural Resources or generate 35.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	79.37%
Values	Daily Returns

Pioneer Natural Resources  vs.  TRAVEL LEISURE DL 01

Pioneer Natural Resources

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Pioneer Natural Resources are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Pioneer Natural reported solid returns over the last few months and may actually be approaching a breakup point.

TRAVEL LEISURE DL

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in TRAVEL LEISURE DL 01 are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, TRAVEL + reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Pioneer Natural and TRAVEL +

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

The idea behind Pioneer Natural Resources and TRAVEL LEISURE DL 01 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.