Correlation Between Gulfport Energy and Evolution Petroleum
Can any of the company-specific risk be diversified away by investing in both Gulfport Energy and Evolution Petroleum 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 Evolution Petroleum 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 Evolution Petroleum, you can compare the effects of market volatilities on Gulfport Energy and Evolution Petroleum 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 Evolution Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gulfport Energy and Evolution Petroleum.
Diversification Opportunities for Gulfport Energy and Evolution Petroleum
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Gulfport and Evolution is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Gulfport Energy Operating and Evolution Petroleum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evolution Petroleum 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 Evolution Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evolution Petroleum has no effect on the direction of Gulfport Energy i.e., Gulfport Energy and Evolution Petroleum go up and down completely randomly.
Pair Corralation between Gulfport Energy and Evolution Petroleum
Given the investment horizon of 90 days Gulfport Energy Operating is expected to under-perform the Evolution Petroleum. In addition to that, Gulfport Energy is 1.64 times more volatile than Evolution Petroleum. It trades about -0.07 of its total potential returns per unit of risk. Evolution Petroleum is currently generating about -0.04 per unit of volatility. If you would invest 532.00 in Evolution Petroleum on November 9, 2024 and sell it today you would lose (7.00) from holding Evolution Petroleum or give up 1.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gulfport Energy Operating vs. Evolution Petroleum
Performance |
| Timeline |
| Gulfport Energy Operating |
| Evolution Petroleum |
Gulfport Energy and Evolution Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gulfport Energy and Evolution Petroleum
The main advantage of trading using opposite Gulfport Energy and Evolution Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gulfport Energy position performs unexpectedly, Evolution Petroleum 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 Evolution Petroleum will offset losses from the drop in Evolution Petroleum'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 |
| Evolution Petroleum vs. GeoPark | Evolution Petroleum vs. Granite Ridge Resources | Evolution Petroleum vs. PHX Minerals | Evolution Petroleum vs. California Resources Corp |
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 Stocks Directory module to find actively traded stocks across global markets.
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