Correlation Between Empire Petroleum and SandRidge Energy
Can any of the company-specific risk be diversified away by investing in both Empire Petroleum 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 Empire Petroleum and SandRidge 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 SandRidge Energy, you can compare the effects of market volatilities on Empire Petroleum 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 Empire Petroleum with a short position of SandRidge Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Empire Petroleum and SandRidge Energy.
Diversification Opportunities for Empire Petroleum and SandRidge Energy
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Empire and SandRidge is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Empire Petroleum Corp and SandRidge Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SandRidge Energy 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 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 Empire Petroleum i.e., Empire Petroleum and SandRidge Energy go up and down completely randomly.
Pair Corralation between Empire Petroleum and SandRidge Energy
Allowing for the 90-day total investment horizon Empire Petroleum is expected to generate 97.52 times less return on investment than SandRidge Energy. In addition to that, Empire Petroleum is 2.04 times more volatile than SandRidge Energy. It trades about 0.0 of its total potential returns per unit of risk. SandRidge Energy is currently generating about 0.46 per unit of volatility. If you would invest 1,053 in SandRidge Energy on October 21, 2024 and sell it today you would earn a total of 195.00 from holding SandRidge Energy or generate 18.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Empire Petroleum Corp vs. SandRidge Energy
Performance |
| Timeline |
| Empire Petroleum Corp |
| SandRidge Energy |
Empire Petroleum and SandRidge Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Empire Petroleum and SandRidge Energy
The main advantage of trading using opposite Empire Petroleum and SandRidge Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Empire Petroleum 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.| Empire Petroleum vs. PHX Minerals | Empire Petroleum vs. Mexco Energy | Empire Petroleum vs. Granite Ridge Resources | Empire Petroleum vs. XXL Energy Corp |
| 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |