Correlation Between Berry Petroleum and Granite Ridge
Can any of the company-specific risk be diversified away by investing in both Berry Petroleum and Granite Ridge 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 Berry Petroleum and Granite Ridge into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Berry Petroleum Corp and Granite Ridge Resources, you can compare the effects of market volatilities on Berry Petroleum and Granite Ridge 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 Berry Petroleum with a short position of Granite Ridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Berry Petroleum and Granite Ridge.
Diversification Opportunities for Berry Petroleum and Granite Ridge
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Berry and Granite is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Berry Petroleum Corp and Granite Ridge Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Granite Ridge Resources and Berry Petroleum 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 Berry Petroleum Corp are associated (or correlated) with Granite Ridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Granite Ridge Resources has no effect on the direction of Berry Petroleum i.e., Berry Petroleum and Granite Ridge go up and down completely randomly.
Pair Corralation between Berry Petroleum and Granite Ridge
Considering the 90-day investment horizon Berry Petroleum Corp is expected to generate 1.64 times more return on investment than Granite Ridge. However, Berry Petroleum is 1.64 times more volatile than Granite Ridge Resources. It trades about -0.12 of its potential returns per unit of risk. Granite Ridge Resources is currently generating about -0.37 per unit of risk. If you would invest 455.00 in Berry Petroleum Corp on November 9, 2024 and sell it today you would lose (27.00) from holding Berry Petroleum Corp or give up 5.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Berry Petroleum Corp vs. Granite Ridge Resources
Performance |
| Timeline |
| Berry Petroleum Corp |
| Granite Ridge Resources |
Berry Petroleum and Granite Ridge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Berry Petroleum and Granite Ridge
The main advantage of trading using opposite Berry Petroleum and Granite Ridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Berry Petroleum position performs unexpectedly, Granite Ridge 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 Granite Ridge will offset losses from the drop in Granite Ridge's long position.| Berry Petroleum vs. California Resources Corp | Berry Petroleum vs. Magnolia Oil Gas | Berry Petroleum vs. Comstock Resources | Berry Petroleum vs. Gulfport Energy Operating |
| Granite Ridge vs. Epsilon Energy | Granite Ridge vs. Gulfport Energy Operating | Granite Ridge vs. North European Oil | Granite Ridge vs. PHX Minerals |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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