Correlation Between Gulfport Energy and GeoPark
Can any of the company-specific risk be diversified away by investing in both Gulfport Energy and GeoPark 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 GeoPark 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 GeoPark, you can compare the effects of market volatilities on Gulfport Energy and GeoPark 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 GeoPark. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gulfport Energy and GeoPark.
Diversification Opportunities for Gulfport Energy and GeoPark
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gulfport and GeoPark is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Gulfport Energy Operating and GeoPark in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GeoPark 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 GeoPark. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GeoPark has no effect on the direction of Gulfport Energy i.e., Gulfport Energy and GeoPark go up and down completely randomly.
Pair Corralation between Gulfport Energy and GeoPark
Given the investment horizon of 90 days Gulfport Energy Operating is expected to generate 0.86 times more return on investment than GeoPark. However, Gulfport Energy Operating is 1.16 times less risky than GeoPark. It trades about 0.11 of its potential returns per unit of risk. GeoPark is currently generating about -0.01 per unit of risk. If you would invest 6,234 in Gulfport Energy Operating on November 9, 2024 and sell it today you would earn a total of 11,919 from holding Gulfport Energy Operating or generate 191.19% 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. GeoPark
Performance |
| Timeline |
| Gulfport Energy Operating |
| GeoPark |
Gulfport Energy and GeoPark Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gulfport Energy and GeoPark
The main advantage of trading using opposite Gulfport Energy and GeoPark positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gulfport Energy position performs unexpectedly, GeoPark 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 GeoPark will offset losses from the drop in GeoPark'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 |
| GeoPark vs. Evolution Petroleum | GeoPark vs. Granite Ridge Resources | GeoPark vs. PHX Minerals | GeoPark 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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