Correlation Between Gulf Keystone and Arrow Exploration
Can any of the company-specific risk be diversified away by investing in both Gulf Keystone and Arrow 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 Gulf Keystone and Arrow Exploration 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 Arrow Exploration Corp, you can compare the effects of market volatilities on Gulf Keystone and Arrow 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 Gulf Keystone with a short position of Arrow Exploration. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gulf Keystone and Arrow Exploration.
Diversification Opportunities for Gulf Keystone and Arrow Exploration
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Gulf and Arrow is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Gulf Keystone Petroleum and Arrow Exploration Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arrow Exploration Corp 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 Arrow Exploration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arrow Exploration Corp has no effect on the direction of Gulf Keystone i.e., Gulf Keystone and Arrow Exploration go up and down completely randomly.
Pair Corralation between Gulf Keystone and Arrow Exploration
Assuming the 90 days horizon Gulf Keystone Petroleum is expected to generate 1.43 times more return on investment than Arrow Exploration. However, Gulf Keystone is 1.43 times more volatile than Arrow Exploration Corp. It trades about 0.15 of its potential returns per unit of risk. Arrow Exploration Corp is currently generating about -0.03 per unit of risk. If you would invest 186.00 in Gulf Keystone Petroleum on November 3, 2024 and sell it today you would earn a total of 27.00 from holding Gulf Keystone Petroleum or generate 14.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gulf Keystone Petroleum vs. Arrow Exploration Corp
Performance |
| Timeline |
| Gulf Keystone Petroleum |
| Arrow Exploration Corp |
Gulf Keystone and Arrow Exploration Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gulf Keystone and Arrow Exploration
The main advantage of trading using opposite Gulf Keystone and Arrow Exploration positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gulf Keystone position performs unexpectedly, Arrow 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 Arrow Exploration will offset losses from the drop in Arrow Exploration'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 |
| Arrow Exploration vs. Barrister Energy LLC | Arrow Exploration vs. Buru Energy Limited | Arrow Exploration vs. Altura Energy | Arrow Exploration vs. Daybreak Oil and |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
Other Complementary Tools
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities |