Correlation Between Oasis Petroleum and Stepstone
Can any of the company-specific risk be diversified away by investing in both Oasis Petroleum and Stepstone 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 Oasis Petroleum and Stepstone into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oasis Petroleum and Stepstone Group, you can compare the effects of market volatilities on Oasis Petroleum and Stepstone 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 Oasis Petroleum with a short position of Stepstone. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oasis Petroleum and Stepstone.
Diversification Opportunities for Oasis Petroleum and Stepstone
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Oasis and Stepstone is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Oasis Petroleum and Stepstone Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stepstone Group and Oasis Petroleum 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 Oasis Petroleum are associated (or correlated) with Stepstone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stepstone Group has no effect on the direction of Oasis Petroleum i.e., Oasis Petroleum and Stepstone go up and down completely randomly.
Pair Corralation between Oasis Petroleum and Stepstone
Assuming the 90 days horizon Oasis Petroleum is expected to generate 3.53 times more return on investment than Stepstone. However, Oasis Petroleum is 3.53 times more volatile than Stepstone Group. It trades about 0.14 of its potential returns per unit of risk. Stepstone Group is currently generating about -0.09 per unit of risk. If you would invest 5,335 in Oasis Petroleum on September 14, 2024 and sell it today you would earn a total of 166.00 from holding Oasis Petroleum or generate 3.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 23.81% |
| Values | Daily Returns |
Oasis Petroleum vs. Stepstone Group
Performance |
| Timeline |
| Oasis Petroleum |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Stepstone Group |
Oasis Petroleum and Stepstone Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oasis Petroleum and Stepstone
The main advantage of trading using opposite Oasis Petroleum and Stepstone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oasis Petroleum position performs unexpectedly, Stepstone 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 Stepstone will offset losses from the drop in Stepstone's long position.| Oasis Petroleum vs. Park Hotels Resorts | Oasis Petroleum vs. Getty Realty | Oasis Petroleum vs. Bt Brands | Oasis Petroleum vs. Cardinal Health |
| Stepstone vs. Visa Class A | Stepstone vs. Diamond Hill Investment | Stepstone vs. Distoken Acquisition | Stepstone vs. AllianceBernstein Holding LP |
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.
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