Correlation Between Dorchester Minerals and SandRidge Energy
Can any of the company-specific risk be diversified away by investing in both Dorchester Minerals and SandRidge 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 Dorchester Minerals and SandRidge Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dorchester Minerals LP and SandRidge Energy, you can compare the effects of market volatilities on Dorchester Minerals and SandRidge 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 Dorchester Minerals with a short position of SandRidge Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dorchester Minerals and SandRidge Energy.
Diversification Opportunities for Dorchester Minerals and SandRidge Energy
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dorchester and SandRidge is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Dorchester Minerals LP and SandRidge Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SandRidge Energy and Dorchester Minerals 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 Dorchester Minerals LP are associated (or correlated) with SandRidge Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SandRidge Energy has no effect on the direction of Dorchester Minerals i.e., Dorchester Minerals and SandRidge Energy go up and down completely randomly.
Pair Corralation between Dorchester Minerals and SandRidge Energy
Given the investment horizon of 90 days Dorchester Minerals LP is expected to generate 0.73 times more return on investment than SandRidge Energy. However, Dorchester Minerals LP is 1.37 times less risky than SandRidge Energy. It trades about 0.06 of its potential returns per unit of risk. SandRidge Energy is currently generating about 0.0 per unit of risk. If you would invest 2,207 in Dorchester Minerals LP on August 30, 2024 and sell it today you would earn a total of 1,212 from holding Dorchester Minerals LP or generate 54.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dorchester Minerals LP vs. SandRidge Energy
Performance |
| Timeline |
| Dorchester Minerals |
| SandRidge Energy |
Dorchester Minerals and SandRidge Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dorchester Minerals and SandRidge Energy
The main advantage of trading using opposite Dorchester Minerals and SandRidge Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dorchester Minerals position performs unexpectedly, SandRidge 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 SandRidge Energy will offset losses from the drop in SandRidge Energy's long position.| Dorchester Minerals vs. Devon Energy | Dorchester Minerals vs. ConocoPhillips | Dorchester Minerals vs. Diamondback Energy | Dorchester Minerals vs. Occidental Petroleum |
| SandRidge Energy vs. Range Resources Corp | SandRidge Energy vs. SM Energy Co | SandRidge Energy vs. Northern Oil Gas |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas |