Correlation Between Gulf Keystone and PetroShale
Can any of the company-specific risk be diversified away by investing in both Gulf Keystone and PetroShale 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 PetroShale 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 PetroShale, you can compare the effects of market volatilities on Gulf Keystone and PetroShale 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 PetroShale. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gulf Keystone and PetroShale.
Diversification Opportunities for Gulf Keystone and PetroShale
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Gulf and PetroShale is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Gulf Keystone Petroleum and PetroShale in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PetroShale 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 PetroShale. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PetroShale has no effect on the direction of Gulf Keystone i.e., Gulf Keystone and PetroShale go up and down completely randomly.
Pair Corralation between Gulf Keystone and PetroShale
Assuming the 90 days horizon Gulf Keystone Petroleum is expected to generate 4.19 times more return on investment than PetroShale. However, Gulf Keystone is 4.19 times more volatile than PetroShale. It trades about 0.12 of its potential returns per unit of risk. PetroShale is currently generating about -0.12 per unit of risk. If you would invest 165.00 in Gulf Keystone Petroleum on August 28, 2024 and sell it today you would earn a total of 20.00 from holding Gulf Keystone Petroleum or generate 12.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gulf Keystone Petroleum vs. PetroShale
Performance |
| Timeline |
| Gulf Keystone Petroleum |
| PetroShale |
Gulf Keystone and PetroShale Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gulf Keystone and PetroShale
The main advantage of trading using opposite Gulf Keystone and PetroShale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gulf Keystone position performs unexpectedly, PetroShale 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 PetroShale will offset losses from the drop in PetroShale'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 |
| PetroShale vs. Dno ASA | PetroShale vs. Horizon Oil Limited | PetroShale vs. Enwell Energy plc | PetroShale vs. Tullow Oil plc |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Stocks Directory Find actively traded stocks across global markets |