Correlation Between PHX Minerals and SilverBow Resources
Can any of the company-specific risk be diversified away by investing in both PHX Minerals and SilverBow Resources 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 PHX Minerals and SilverBow Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PHX Minerals and SilverBow Resources, you can compare the effects of market volatilities on PHX Minerals and SilverBow Resources 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 PHX Minerals with a short position of SilverBow Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of PHX Minerals and SilverBow Resources.
Diversification Opportunities for PHX Minerals and SilverBow Resources
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PHX and SilverBow is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding PHX Minerals and SilverBow Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SilverBow Resources and PHX Minerals 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 PHX Minerals are associated (or correlated) with SilverBow Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SilverBow Resources has no effect on the direction of PHX Minerals i.e., PHX Minerals and SilverBow Resources go up and down completely randomly.
Pair Corralation between PHX Minerals and SilverBow Resources
Considering the 90-day investment horizon PHX Minerals is expected to generate 0.41 times more return on investment than SilverBow Resources. However, PHX Minerals is 2.44 times less risky than SilverBow Resources. It trades about 0.03 of its potential returns per unit of risk. SilverBow Resources is currently generating about -0.02 per unit of risk. If you would invest 324.00 in PHX Minerals on August 27, 2024 and sell it today you would earn a total of 57.00 from holding PHX Minerals or generate 17.59% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 83.47% |
Values | Daily Returns |
PHX Minerals vs. SilverBow Resources
Performance |
Timeline |
PHX Minerals |
SilverBow Resources |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
PHX Minerals and SilverBow Resources Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with PHX Minerals and SilverBow Resources
The main advantage of trading using opposite PHX Minerals and SilverBow Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PHX Minerals position performs unexpectedly, SilverBow Resources 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 SilverBow Resources will offset losses from the drop in SilverBow Resources' long position.PHX Minerals vs. Devon Energy | PHX Minerals vs. ConocoPhillips | PHX Minerals vs. Occidental Petroleum | PHX Minerals vs. Permian Resources |
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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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