Correlation Between Expand Energy and SandRidge Energy
Can any of the company-specific risk be diversified away by investing in both Expand Energy 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 Expand Energy and SandRidge Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Expand Energy and SandRidge Energy, you can compare the effects of market volatilities on Expand Energy 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 Expand Energy with a short position of SandRidge Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Expand Energy and SandRidge Energy.
Diversification Opportunities for Expand Energy and SandRidge Energy
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Expand and SandRidge is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Expand Energy and SandRidge Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SandRidge Energy and Expand 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 Expand Energy 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 Expand Energy i.e., Expand Energy and SandRidge Energy go up and down completely randomly.
Pair Corralation between Expand Energy and SandRidge Energy
Considering the 90-day investment horizon Expand Energy is expected to generate 0.87 times more return on investment than SandRidge Energy. However, Expand Energy is 1.15 times less risky than SandRidge Energy. It trades about 0.07 of its potential returns per unit of risk. SandRidge Energy is currently generating about 0.01 per unit of risk. If you would invest 7,831 in Expand Energy on August 27, 2024 and sell it today you would earn a total of 2,112 from holding Expand Energy or generate 26.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Expand Energy vs. SandRidge Energy
Performance |
| Timeline |
| Expand Energy |
| SandRidge Energy |
Expand Energy and SandRidge Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Expand Energy and SandRidge Energy
The main advantage of trading using opposite Expand Energy and SandRidge Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Expand Energy 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.| Expand Energy vs. Antero Resources Corp | Expand Energy vs. Empire Petroleum Corp | Expand Energy vs. Permian Resources | Expand Energy vs. SandRidge Energy |
| SandRidge Energy vs. Devon Energy | SandRidge Energy vs. ConocoPhillips | SandRidge Energy vs. Occidental Petroleum | SandRidge Energy vs. Permian Resources |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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