Correlation Between Gulfport Energy and Dorchester Minerals
Can any of the company-specific risk be diversified away by investing in both Gulfport Energy and Dorchester Minerals 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 Dorchester Minerals 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 Dorchester Minerals LP, you can compare the effects of market volatilities on Gulfport Energy and Dorchester Minerals 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 Dorchester Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gulfport Energy and Dorchester Minerals.
Diversification Opportunities for Gulfport Energy and Dorchester Minerals
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gulfport and Dorchester is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Gulfport Energy Operating and Dorchester Minerals LP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dorchester 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 Dorchester Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dorchester Minerals has no effect on the direction of Gulfport Energy i.e., Gulfport Energy and Dorchester Minerals go up and down completely randomly.
Pair Corralation between Gulfport Energy and Dorchester Minerals
Given the investment horizon of 90 days Gulfport Energy Operating is expected to generate 1.44 times more return on investment than Dorchester Minerals. However, Gulfport Energy is 1.44 times more volatile than Dorchester Minerals LP. It trades about 0.23 of its potential returns per unit of risk. Dorchester Minerals LP is currently generating about -0.07 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. Dorchester Minerals LP
Performance |
| Timeline |
| Gulfport Energy Operating |
| Dorchester Minerals |
Gulfport Energy and Dorchester Minerals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gulfport Energy and Dorchester Minerals
The main advantage of trading using opposite Gulfport Energy and Dorchester Minerals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gulfport Energy position performs unexpectedly, Dorchester Minerals 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 Dorchester Minerals will offset losses from the drop in Dorchester Minerals' 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 |
| Dorchester Minerals vs. Evolution Petroleum | Dorchester Minerals vs. Ring Energy | Dorchester Minerals vs. Gran Tierra Energy | Dorchester Minerals 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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