Correlation Between Black Stone and Southwestern Energy
Can any of the company-specific risk be diversified away by investing in both Black Stone and Southwestern Energy 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 Southwestern Energy 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 Southwestern Energy, you can compare the effects of market volatilities on Black Stone and Southwestern Energy 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 Southwestern Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Black Stone and Southwestern Energy.
Diversification Opportunities for Black Stone and Southwestern Energy
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Black and Southwestern is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Black Stone Minerals and Southwestern Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southwestern Energy 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 Southwestern Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southwestern Energy has no effect on the direction of Black Stone i.e., Black Stone and Southwestern Energy go up and down completely randomly.
Pair Corralation between Black Stone and Southwestern Energy
If you would invest 1,386 in Black Stone Minerals on October 20, 2024 and sell it today you would earn a total of 173.00 from holding Black Stone Minerals or generate 12.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 5.0% |
| Values | Daily Returns |
Black Stone Minerals vs. Southwestern Energy
Performance |
| Timeline |
| Black Stone Minerals |
| Southwestern Energy |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Black Stone and Southwestern Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Black Stone and Southwestern Energy
The main advantage of trading using opposite Black Stone and Southwestern Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Black Stone position performs unexpectedly, Southwestern Energy 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 Southwestern Energy will offset losses from the drop in Southwestern Energy'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 |
| Southwestern Energy vs. Antero Resources Corp | Southwestern Energy vs. EQT Corporation | Southwestern Energy vs. Matador Resources | Southwestern Energy vs. Range Resources Corp |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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