Correlation Between Pantheon Resources and SandRidge Energy
Can any of the company-specific risk be diversified away by investing in both Pantheon Resources and SandRidge Energy 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 Pantheon Resources and SandRidge Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pantheon Resources Plc and SandRidge Energy, you can compare the effects of market volatilities on Pantheon Resources and SandRidge Energy 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 Pantheon Resources with a short position of SandRidge Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pantheon Resources and SandRidge Energy.
Diversification Opportunities for Pantheon Resources and SandRidge Energy
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Pantheon and SandRidge is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Pantheon Resources Plc and SandRidge Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SandRidge Energy and Pantheon Resources 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 Pantheon Resources Plc are associated (or correlated) with SandRidge Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SandRidge Energy has no effect on the direction of Pantheon Resources i.e., Pantheon Resources and SandRidge Energy go up and down completely randomly.
Pair Corralation between Pantheon Resources and SandRidge Energy
Assuming the 90 days horizon Pantheon Resources Plc is expected to generate 5.31 times more return on investment than SandRidge Energy. However, Pantheon Resources is 5.31 times more volatile than SandRidge Energy. It trades about 0.47 of its potential returns per unit of risk. SandRidge Energy is currently generating about -0.05 per unit of risk. If you would invest 36.00 in Pantheon Resources Plc on November 3, 2024 and sell it today you would earn a total of 28.00 from holding Pantheon Resources Plc or generate 77.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pantheon Resources Plc vs. SandRidge Energy
Performance |
| Timeline |
| Pantheon Resources Plc |
| SandRidge Energy |
Pantheon Resources and SandRidge Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pantheon Resources and SandRidge Energy
The main advantage of trading using opposite Pantheon Resources and SandRidge Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pantheon Resources position performs unexpectedly, SandRidge Energy 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 SandRidge Energy will offset losses from the drop in SandRidge Energy's long position.| Pantheon Resources vs. CGX Energy | Pantheon Resources vs. Eco Oil Gas | Pantheon Resources vs. Reconnaissance Energy Africa | Pantheon Resources vs. Sintana Energy |
| SandRidge Energy vs. Range Resources Corp | SandRidge Energy vs. SM Energy Co | SandRidge Energy vs. Northern Oil Gas |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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