Correlation Between Riley Exploration and SandRidge Mississippian
Can any of the company-specific risk be diversified away by investing in both Riley Exploration and SandRidge Mississippian 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 SandRidge Mississippian 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 SandRidge Mississippian Trust, you can compare the effects of market volatilities on Riley Exploration and SandRidge Mississippian 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 SandRidge Mississippian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Riley Exploration and SandRidge Mississippian.
Diversification Opportunities for Riley Exploration and SandRidge Mississippian
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Riley and SandRidge is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Riley Exploration Permian and SandRidge Mississippian Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SandRidge Mississippian 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 SandRidge Mississippian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SandRidge Mississippian has no effect on the direction of Riley Exploration i.e., Riley Exploration and SandRidge Mississippian go up and down completely randomly.
Pair Corralation between Riley Exploration and SandRidge Mississippian
If you would invest 2,591 in Riley Exploration Permian on September 3, 2024 and sell it today you would earn a total of 901.00 from holding Riley Exploration Permian or generate 34.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.8% |
| Values | Daily Returns |
Riley Exploration Permian vs. SandRidge Mississippian Trust
Performance |
| Timeline |
| Riley Exploration Permian |
| SandRidge Mississippian |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Riley Exploration and SandRidge Mississippian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Riley Exploration and SandRidge Mississippian
The main advantage of trading using opposite Riley Exploration and SandRidge Mississippian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Riley Exploration position performs unexpectedly, SandRidge Mississippian 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 Mississippian will offset losses from the drop in SandRidge Mississippian's long position.| Riley Exploration vs. Vital Energy | Riley Exploration vs. Permian Resources | Riley Exploration vs. Magnolia Oil Gas | Riley Exploration vs. Ring Energy |
| SandRidge Mississippian vs. PetroShale | SandRidge Mississippian vs. Inpex Corp ADR | SandRidge Mississippian vs. Canacol Energy | SandRidge Mississippian vs. Battalion Oil Corp |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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