Correlation Between Riley Exploration and SilverBow Resources
Can any of the company-specific risk be diversified away by investing in both Riley Exploration 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 Riley Exploration and SilverBow Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Riley Exploration Permian and SilverBow Resources, you can compare the effects of market volatilities on Riley Exploration 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 Riley Exploration with a short position of SilverBow Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Riley Exploration and SilverBow Resources.
Diversification Opportunities for Riley Exploration and SilverBow Resources
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Riley and SilverBow is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Riley Exploration Permian and SilverBow Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SilverBow Resources and Riley Exploration 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 Riley Exploration Permian 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 Riley Exploration i.e., Riley Exploration and SilverBow Resources go up and down completely randomly.
Pair Corralation between Riley Exploration and SilverBow Resources
Given the investment horizon of 90 days Riley Exploration Permian is expected to generate 0.59 times more return on investment than SilverBow Resources. However, Riley Exploration Permian is 1.69 times less risky than SilverBow Resources. It trades about 0.04 of its potential returns per unit of risk. SilverBow Resources is currently generating about -0.03 per unit of risk. If you would invest 2,647 in Riley Exploration Permian on August 25, 2024 and sell it today you would earn a total of 1,041 from holding Riley Exploration Permian or generate 39.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 83.5% |
| Values | Daily Returns |
Riley Exploration Permian vs. SilverBow Resources
Performance |
| Timeline |
| Riley Exploration Permian |
| SilverBow Resources |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Riley Exploration and SilverBow Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Riley Exploration and SilverBow Resources
The main advantage of trading using opposite Riley Exploration and SilverBow Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Riley Exploration 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.| Riley Exploration vs. Vital Energy | Riley Exploration vs. Permian Resources | Riley Exploration vs. Magnolia Oil Gas | Riley Exploration vs. Ring Energy |
| SilverBow Resources vs. Vital Energy | SilverBow Resources vs. Permian Resources | SilverBow Resources vs. Magnolia Oil Gas | SilverBow Resources vs. Ring Energy |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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