Correlation Between GeoPark and Gulfport Energy
Can any of the company-specific risk be diversified away by investing in both GeoPark and Gulfport Energy 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 Gulfport Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GeoPark and Gulfport Energy Operating, you can compare the effects of market volatilities on GeoPark and Gulfport Energy 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 Gulfport Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of GeoPark and Gulfport Energy.
Diversification Opportunities for GeoPark and Gulfport Energy
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GeoPark and Gulfport is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding GeoPark and Gulfport Energy Operating in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gulfport Energy Operating 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 Gulfport Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gulfport Energy Operating has no effect on the direction of GeoPark i.e., GeoPark and Gulfport Energy go up and down completely randomly.
Pair Corralation between GeoPark and Gulfport Energy
Given the investment horizon of 90 days GeoPark is expected to under-perform the Gulfport Energy. In addition to that, GeoPark is 1.16 times more volatile than Gulfport Energy Operating. It trades about -0.01 of its total potential returns per unit of risk. Gulfport Energy Operating is currently generating about 0.11 per unit of volatility. 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 |
GeoPark vs. Gulfport Energy Operating
Performance |
| Timeline |
| GeoPark |
| Gulfport Energy Operating |
GeoPark and Gulfport Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GeoPark and Gulfport Energy
The main advantage of trading using opposite GeoPark and Gulfport Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GeoPark position performs unexpectedly, Gulfport Energy 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 Gulfport Energy will offset losses from the drop in Gulfport Energy's long position.| GeoPark vs. Evolution Petroleum | GeoPark vs. Granite Ridge Resources | GeoPark vs. PHX Minerals | GeoPark vs. California Resources Corp |
| Gulfport Energy vs. Epsilon Energy | Gulfport Energy vs. Granite Ridge Resources | Gulfport Energy vs. North European Oil | Gulfport Energy vs. CNX 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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