Correlation Between GulfSlope Energy and Foothills Exploration
Can any of the company-specific risk be diversified away by investing in both GulfSlope Energy and Foothills Exploration 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 GulfSlope Energy and Foothills Exploration into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GulfSlope Energy and Foothills Exploration, you can compare the effects of market volatilities on GulfSlope Energy and Foothills Exploration 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 GulfSlope Energy with a short position of Foothills Exploration. Check out your portfolio center. Please also check ongoing floating volatility patterns of GulfSlope Energy and Foothills Exploration.
Diversification Opportunities for GulfSlope Energy and Foothills Exploration
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GulfSlope and Foothills is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding GulfSlope Energy and Foothills Exploration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Foothills Exploration and GulfSlope 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 GulfSlope Energy are associated (or correlated) with Foothills Exploration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Foothills Exploration has no effect on the direction of GulfSlope Energy i.e., GulfSlope Energy and Foothills Exploration go up and down completely randomly.
Pair Corralation between GulfSlope Energy and Foothills Exploration
Given the investment horizon of 90 days GulfSlope Energy is expected to generate 1.73 times less return on investment than Foothills Exploration. In addition to that, GulfSlope Energy is 1.56 times more volatile than Foothills Exploration. It trades about 0.05 of its total potential returns per unit of risk. Foothills Exploration is currently generating about 0.12 per unit of volatility. If you would invest 0.02 in Foothills Exploration on September 3, 2024 and sell it today you would lose (0.01) from holding Foothills Exploration or give up 50.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GulfSlope Energy vs. Foothills Exploration
Performance |
| Timeline |
| GulfSlope Energy |
| Foothills Exploration |
GulfSlope Energy and Foothills Exploration Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GulfSlope Energy and Foothills Exploration
The main advantage of trading using opposite GulfSlope Energy and Foothills Exploration positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GulfSlope Energy position performs unexpectedly, Foothills Exploration 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 Foothills Exploration will offset losses from the drop in Foothills Exploration's long position.| GulfSlope Energy vs. Seadrill Limited | GulfSlope Energy vs. Noble plc | GulfSlope Energy vs. Borr Drilling | GulfSlope Energy vs. SCOR PK |
| Foothills Exploration vs. CNX Resources Corp | Foothills Exploration vs. MV Oil Trust | Foothills Exploration vs. San Juan Basin | Foothills Exploration vs. VOC Energy Trust |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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