Correlation Between Greenfire Resources and Ring Energy
Can any of the company-specific risk be diversified away by investing in both Greenfire Resources and Ring 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 Greenfire Resources and Ring Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Greenfire Resources and Ring Energy, you can compare the effects of market volatilities on Greenfire Resources and Ring 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 Greenfire Resources with a short position of Ring Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Greenfire Resources and Ring Energy.
Diversification Opportunities for Greenfire Resources and Ring Energy
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Greenfire and Ring is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Greenfire Resources and Ring Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ring Energy and Greenfire Resources 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 Greenfire Resources are associated (or correlated) with Ring Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ring Energy has no effect on the direction of Greenfire Resources i.e., Greenfire Resources and Ring Energy go up and down completely randomly.
Pair Corralation between Greenfire Resources and Ring Energy
Considering the 90-day investment horizon Greenfire Resources is expected to generate 0.88 times more return on investment than Ring Energy. However, Greenfire Resources is 1.14 times less risky than Ring Energy. It trades about 0.05 of its potential returns per unit of risk. Ring Energy is currently generating about 0.0 per unit of risk. If you would invest 520.00 in Greenfire Resources on September 14, 2024 and sell it today you would earn a total of 145.50 from holding Greenfire Resources or generate 27.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Greenfire Resources vs. Ring Energy
Performance |
| Timeline |
| Greenfire Resources |
| Ring Energy |
Greenfire Resources and Ring Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Greenfire Resources and Ring Energy
The main advantage of trading using opposite Greenfire Resources and Ring Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Greenfire Resources position performs unexpectedly, Ring 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 Ring Energy will offset losses from the drop in Ring Energy's long position.| Greenfire Resources vs. Evolution Petroleum | Greenfire Resources vs. Ring Energy | Greenfire Resources vs. Gran Tierra Energy | Greenfire Resources vs. Permian Resources |
| Ring Energy vs. Vital Energy | Ring Energy vs. Permian Resources | Ring Energy vs. Magnolia Oil Gas | Ring Energy vs. SM Energy Co |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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