Correlation Between Gulf Keystone and Condor Petroleum
Can any of the company-specific risk be diversified away by investing in both Gulf Keystone and Condor Petroleum 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 Gulf Keystone and Condor Petroleum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gulf Keystone Petroleum and Condor Petroleum, you can compare the effects of market volatilities on Gulf Keystone and Condor Petroleum 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 Gulf Keystone with a short position of Condor Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gulf Keystone and Condor Petroleum.
Diversification Opportunities for Gulf Keystone and Condor Petroleum
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Gulf and Condor is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Gulf Keystone Petroleum and Condor Petroleum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Condor Petroleum and Gulf Keystone 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 Gulf Keystone Petroleum are associated (or correlated) with Condor Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Condor Petroleum has no effect on the direction of Gulf Keystone i.e., Gulf Keystone and Condor Petroleum go up and down completely randomly.
Pair Corralation between Gulf Keystone and Condor Petroleum
Assuming the 90 days horizon Gulf Keystone is expected to generate 3.53 times less return on investment than Condor Petroleum. But when comparing it to its historical volatility, Gulf Keystone Petroleum is 1.59 times less risky than Condor Petroleum. It trades about 0.03 of its potential returns per unit of risk. Condor Petroleum is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 50.00 in Condor Petroleum on August 31, 2024 and sell it today you would earn a total of 111.00 from holding Condor Petroleum or generate 222.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.73% |
| Values | Daily Returns |
Gulf Keystone Petroleum vs. Condor Petroleum
Performance |
| Timeline |
| Gulf Keystone Petroleum |
| Condor Petroleum |
Gulf Keystone and Condor Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gulf Keystone and Condor Petroleum
The main advantage of trading using opposite Gulf Keystone and Condor Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gulf Keystone position performs unexpectedly, Condor Petroleum 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 Condor Petroleum will offset losses from the drop in Condor Petroleum's long position.| Gulf Keystone vs. San Leon Energy | Gulf Keystone vs. Enwell Energy plc | Gulf Keystone vs. Dno ASA | Gulf Keystone vs. Questerre Energy |
| Condor Petroleum vs. Petroleo Brasileiro Petrobras | Condor Petroleum vs. Equinor ASA ADR | Condor Petroleum vs. Eni SpA ADR | Condor Petroleum vs. YPF Sociedad Anonima |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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