Correlation Between Earthstone Energy and Gulf Keystone
Can any of the company-specific risk be diversified away by investing in both Earthstone Energy and Gulf Keystone 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 Earthstone Energy and Gulf Keystone into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Earthstone Energy and Gulf Keystone Petroleum, you can compare the effects of market volatilities on Earthstone Energy and Gulf Keystone 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 Earthstone Energy with a short position of Gulf Keystone. Check out your portfolio center. Please also check ongoing floating volatility patterns of Earthstone Energy and Gulf Keystone.
Diversification Opportunities for Earthstone Energy and Gulf Keystone
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Earthstone and Gulf is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Earthstone Energy and Gulf Keystone Petroleum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gulf Keystone Petroleum and Earthstone Energy 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 Earthstone Energy are associated (or correlated) with Gulf Keystone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gulf Keystone Petroleum has no effect on the direction of Earthstone Energy i.e., Earthstone Energy and Gulf Keystone go up and down completely randomly.
Pair Corralation between Earthstone Energy and Gulf Keystone
If you would invest 179.00 in Gulf Keystone Petroleum on October 24, 2024 and sell it today you would earn a total of 25.00 from holding Gulf Keystone Petroleum or generate 13.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 5.56% |
| Values | Daily Returns |
Earthstone Energy vs. Gulf Keystone Petroleum
Performance |
| Timeline |
| Earthstone Energy |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Gulf Keystone Petroleum |
Earthstone Energy and Gulf Keystone Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Earthstone Energy and Gulf Keystone
The main advantage of trading using opposite Earthstone Energy and Gulf Keystone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Earthstone Energy position performs unexpectedly, Gulf Keystone 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 Gulf Keystone will offset losses from the drop in Gulf Keystone's long position.| Earthstone Energy vs. Vital Energy | Earthstone Energy vs. Comstock Resources | Earthstone Energy vs. Magnolia Oil Gas | Earthstone Energy vs. Obsidian Energy |
| Gulf Keystone vs. San Leon Energy | Gulf Keystone vs. Enwell Energy plc | Gulf Keystone vs. Dno ASA | Gulf Keystone vs. Questerre Energy |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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