Correlation Between Empire Petroleum and Gulfport Energy
Can any of the company-specific risk be diversified away by investing in both Empire Petroleum and Gulfport 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 Empire Petroleum and Gulfport Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Empire Petroleum Corp and Gulfport Energy Operating, you can compare the effects of market volatilities on Empire Petroleum and Gulfport 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 Empire Petroleum with a short position of Gulfport Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Empire Petroleum and Gulfport Energy.
Diversification Opportunities for Empire Petroleum and Gulfport Energy
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Empire and Gulfport is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Empire Petroleum Corp and Gulfport Energy Operating in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gulfport Energy Operating and Empire 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 Empire Petroleum Corp are associated (or correlated) with Gulfport Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gulfport Energy Operating has no effect on the direction of Empire Petroleum i.e., Empire Petroleum and Gulfport Energy go up and down completely randomly.
Pair Corralation between Empire Petroleum and Gulfport Energy
Allowing for the 90-day total investment horizon Empire Petroleum Corp is expected to generate 1.67 times more return on investment than Gulfport Energy. However, Empire Petroleum is 1.67 times more volatile than Gulfport Energy Operating. It trades about 0.14 of its potential returns per unit of risk. Gulfport Energy Operating is currently generating about 0.17 per unit of risk. If you would invest 525.00 in Empire Petroleum Corp on September 3, 2024 and sell it today you would earn a total of 108.00 from holding Empire Petroleum Corp or generate 20.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Empire Petroleum Corp vs. Gulfport Energy Operating
Performance |
| Timeline |
| Empire Petroleum Corp |
| Gulfport Energy Operating |
Empire Petroleum and Gulfport Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Empire Petroleum and Gulfport Energy
The main advantage of trading using opposite Empire Petroleum and Gulfport Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Empire Petroleum position performs unexpectedly, Gulfport 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 Gulfport Energy will offset losses from the drop in Gulfport Energy's long position.| Empire Petroleum vs. PHX Minerals | Empire Petroleum vs. Mexco Energy | Empire Petroleum vs. Granite Ridge Resources | Empire Petroleum vs. XXL Energy Corp |
| Gulfport Energy vs. Granite Ridge Resources | Gulfport Energy vs. North European Oil | Gulfport Energy vs. CNX Resources Corp | Gulfport Energy vs. GeoPark |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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