Correlation Between Black Stone and Magnolia Oil
Can any of the company-specific risk be diversified away by investing in both Black Stone and Magnolia Oil 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 Black Stone and Magnolia Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Black Stone Minerals and Magnolia Oil Gas, you can compare the effects of market volatilities on Black Stone and Magnolia Oil 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 Black Stone with a short position of Magnolia Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Black Stone and Magnolia Oil.
Diversification Opportunities for Black Stone and Magnolia Oil
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Black and Magnolia is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Black Stone Minerals and Magnolia Oil Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magnolia Oil Gas and Black Stone 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 Black Stone Minerals are associated (or correlated) with Magnolia Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Magnolia Oil Gas has no effect on the direction of Black Stone i.e., Black Stone and Magnolia Oil go up and down completely randomly.
Pair Corralation between Black Stone and Magnolia Oil
Considering the 90-day investment horizon Black Stone is expected to generate 3.92 times less return on investment than Magnolia Oil. But when comparing it to its historical volatility, Black Stone Minerals is 1.24 times less risky than Magnolia Oil. It trades about 0.05 of its potential returns per unit of risk. Magnolia Oil Gas is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 2,360 in Magnolia Oil Gas on November 2, 2024 and sell it today you would earn a total of 90.00 from holding Magnolia Oil Gas or generate 3.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Black Stone Minerals vs. Magnolia Oil Gas
Performance |
| Timeline |
| Black Stone Minerals |
| Magnolia Oil Gas |
Black Stone and Magnolia Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Black Stone and Magnolia Oil
The main advantage of trading using opposite Black Stone and Magnolia Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Black Stone position performs unexpectedly, Magnolia Oil 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 Magnolia Oil will offset losses from the drop in Magnolia Oil's long position.| Black Stone vs. Dorchester Minerals LP | Black Stone vs. Sitio Royalties Corp | Black Stone vs. MV Oil Trust | Black Stone vs. VOC Energy Trust |
| Magnolia Oil vs. SM Energy Co | Magnolia Oil vs. Civitas Resources | Magnolia Oil vs. Range Resources Corp | Magnolia Oil vs. Matador 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Commodity Directory Find actively traded commodities issued by global exchanges |