Correlation Between GeoPark and Granite Ridge
Can any of the company-specific risk be diversified away by investing in both GeoPark and Granite Ridge 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 Granite Ridge into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GeoPark and Granite Ridge Resources, you can compare the effects of market volatilities on GeoPark and Granite Ridge 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 Granite Ridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of GeoPark and Granite Ridge.
Diversification Opportunities for GeoPark and Granite Ridge
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GeoPark and Granite is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding GeoPark and Granite Ridge Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Granite Ridge 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 Granite Ridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Granite Ridge Resources has no effect on the direction of GeoPark i.e., GeoPark and Granite Ridge go up and down completely randomly.
Pair Corralation between GeoPark and Granite Ridge
Given the investment horizon of 90 days GeoPark is expected to generate 1.18 times less return on investment than Granite Ridge. In addition to that, GeoPark is 1.24 times more volatile than Granite Ridge Resources. It trades about 0.05 of its total potential returns per unit of risk. Granite Ridge Resources is currently generating about 0.07 per unit of volatility. If you would invest 512.00 in Granite Ridge Resources on October 20, 2024 and sell it today you would earn a total of 171.00 from holding Granite Ridge Resources or generate 33.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GeoPark vs. Granite Ridge Resources
Performance |
| Timeline |
| GeoPark |
| Granite Ridge Resources |
GeoPark and Granite Ridge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GeoPark and Granite Ridge
The main advantage of trading using opposite GeoPark and Granite Ridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GeoPark position performs unexpectedly, Granite Ridge 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 Granite Ridge will offset losses from the drop in Granite Ridge's long position.| GeoPark vs. Evolution Petroleum | GeoPark vs. Granite Ridge Resources | GeoPark vs. PHX Minerals | GeoPark vs. California Resources Corp |
| Granite Ridge vs. Epsilon Energy | Granite Ridge vs. Gulfport Energy Operating | Granite Ridge vs. North European Oil | Granite Ridge vs. PHX Minerals |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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