Correlation Between Evolution Petroleum and Gulfport Energy
Can any of the company-specific risk be diversified away by investing in both Evolution 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 Evolution 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 Evolution Petroleum and Gulfport Energy Operating, you can compare the effects of market volatilities on Evolution 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 Evolution Petroleum with a short position of Gulfport Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evolution Petroleum and Gulfport Energy.
Diversification Opportunities for Evolution Petroleum and Gulfport Energy
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Evolution and Gulfport is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Evolution Petroleum 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 Evolution 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 Evolution Petroleum 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 Evolution Petroleum i.e., Evolution Petroleum and Gulfport Energy go up and down completely randomly.
Pair Corralation between Evolution Petroleum and Gulfport Energy
Considering the 90-day investment horizon Evolution Petroleum is expected to generate 0.61 times more return on investment than Gulfport Energy. However, Evolution Petroleum is 1.64 times less risky than Gulfport Energy. It trades about -0.04 of its potential returns per unit of risk. Gulfport Energy Operating is currently generating about -0.07 per unit of risk. If you would invest 532.00 in Evolution Petroleum on November 9, 2024 and sell it today you would lose (7.00) from holding Evolution Petroleum or give up 1.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Evolution Petroleum vs. Gulfport Energy Operating
Performance |
| Timeline |
| Evolution Petroleum |
| Gulfport Energy Operating |
Evolution Petroleum and Gulfport Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evolution Petroleum and Gulfport Energy
The main advantage of trading using opposite Evolution Petroleum and Gulfport Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evolution 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.| Evolution Petroleum vs. GeoPark | Evolution Petroleum vs. Granite Ridge Resources | Evolution Petroleum vs. PHX Minerals | Evolution Petroleum vs. California Resources Corp |
| Gulfport Energy vs. Epsilon Energy | Gulfport Energy vs. Granite Ridge Resources | Gulfport Energy vs. North European Oil | Gulfport Energy vs. CNX 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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