Correlation Between Granite Ridge and Gulfport Energy
Can any of the company-specific risk be diversified away by investing in both Granite Ridge 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 Granite Ridge and Gulfport Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Granite Ridge Resources and Gulfport Energy Operating, you can compare the effects of market volatilities on Granite Ridge 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 Granite Ridge with a short position of Gulfport Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Granite Ridge and Gulfport Energy.
Diversification Opportunities for Granite Ridge and Gulfport Energy
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Granite and Gulfport is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Granite Ridge Resources 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 Granite Ridge 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 Granite Ridge Resources 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 Granite Ridge i.e., Granite Ridge and Gulfport Energy go up and down completely randomly.
Pair Corralation between Granite Ridge and Gulfport Energy
Given the investment horizon of 90 days Granite Ridge Resources is expected to under-perform the Gulfport Energy. But the stock apears to be less risky and, when comparing its historical volatility, Granite Ridge Resources is 1.55 times less risky than Gulfport Energy. The stock trades about -0.37 of its potential returns per unit of risk. The Gulfport Energy Operating is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 18,770 in Gulfport Energy Operating on November 9, 2024 and sell it today you would lose (617.00) from holding Gulfport Energy Operating or give up 3.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Granite Ridge Resources vs. Gulfport Energy Operating
Performance |
| Timeline |
| Granite Ridge Resources |
| Gulfport Energy Operating |
Granite Ridge and Gulfport Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Granite Ridge and Gulfport Energy
The main advantage of trading using opposite Granite Ridge and Gulfport Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Granite Ridge 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.| Granite Ridge vs. Epsilon Energy | Granite Ridge vs. Gulfport Energy Operating | Granite Ridge vs. North European Oil | Granite Ridge vs. PHX Minerals |
| 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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