Correlation Between GeoPark and Denbury Resources
Can any of the company-specific risk be diversified away by investing in both GeoPark and Denbury Resources 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 GeoPark and Denbury Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GeoPark and Denbury Resources, you can compare the effects of market volatilities on GeoPark and Denbury Resources 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 GeoPark with a short position of Denbury Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of GeoPark and Denbury Resources.
Diversification Opportunities for GeoPark and Denbury Resources
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GeoPark and Denbury is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding GeoPark and Denbury Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Denbury Resources and GeoPark 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 GeoPark are associated (or correlated) with Denbury Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Denbury Resources has no effect on the direction of GeoPark i.e., GeoPark and Denbury Resources go up and down completely randomly.
Pair Corralation between GeoPark and Denbury Resources
If you would invest 8,653 in Denbury Resources on November 5, 2024 and sell it today you would earn a total of 0.00 from holding Denbury Resources or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 5.26% |
| Values | Daily Returns |
GeoPark vs. Denbury Resources
Performance |
| Timeline |
| GeoPark |
| Denbury Resources |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
GeoPark and Denbury Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GeoPark and Denbury Resources
The main advantage of trading using opposite GeoPark and Denbury Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GeoPark position performs unexpectedly, Denbury Resources 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 Denbury Resources will offset losses from the drop in Denbury Resources' long position.| GeoPark vs. Evolution Petroleum | GeoPark vs. Granite Ridge Resources | GeoPark vs. PHX Minerals | GeoPark vs. California Resources Corp |
| Denbury Resources vs. Matador Resources | Denbury Resources vs. Murphy Oil | Denbury Resources vs. Civitas Resources | Denbury Resources vs. Chord Energy 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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