Correlation Between Gulfport Energy and Black Stone
Can any of the company-specific risk be diversified away by investing in both Gulfport Energy and Black Stone 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 Gulfport Energy and Black Stone into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gulfport Energy Operating and Black Stone Minerals, you can compare the effects of market volatilities on Gulfport Energy and Black Stone 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 Gulfport Energy with a short position of Black Stone. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gulfport Energy and Black Stone.
Diversification Opportunities for Gulfport Energy and Black Stone
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gulfport and Black is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Gulfport Energy Operating and Black Stone Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Black Stone Minerals and Gulfport 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 Gulfport Energy Operating are associated (or correlated) with Black Stone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Black Stone Minerals has no effect on the direction of Gulfport Energy i.e., Gulfport Energy and Black Stone go up and down completely randomly.
Pair Corralation between Gulfport Energy and Black Stone
Given the investment horizon of 90 days Gulfport Energy Operating is expected to generate 1.62 times more return on investment than Black Stone. However, Gulfport Energy is 1.62 times more volatile than Black Stone Minerals. It trades about 0.23 of its potential returns per unit of risk. Black Stone Minerals is currently generating about -0.11 per unit of risk. If you would invest 16,405 in Gulfport Energy Operating on September 12, 2024 and sell it today you would earn a total of 1,520 from holding Gulfport Energy Operating or generate 9.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gulfport Energy Operating vs. Black Stone Minerals
Performance |
| Timeline |
| Gulfport Energy Operating |
| Black Stone Minerals |
Gulfport Energy and Black Stone Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gulfport Energy and Black Stone
The main advantage of trading using opposite Gulfport Energy and Black Stone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gulfport Energy position performs unexpectedly, Black Stone 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 Black Stone will offset losses from the drop in Black Stone's long position.| Gulfport Energy vs. Epsilon Energy | Gulfport Energy vs. Granite Ridge Resources | Gulfport Energy vs. North European Oil | Gulfport Energy vs. CNX Resources Corp |
| Black Stone vs. Dorchester Minerals LP | Black Stone vs. Sitio Royalties Corp | Black Stone vs. MV Oil Trust | Black Stone vs. VOC Energy Trust |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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