Correlation Between Pacific Coast and Gulf Keystone
Can any of the company-specific risk be diversified away by investing in both Pacific Coast and Gulf Keystone 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 Pacific Coast and Gulf Keystone into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pacific Coast Oil and Gulf Keystone Petroleum, you can compare the effects of market volatilities on Pacific Coast and Gulf Keystone 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 Pacific Coast with a short position of Gulf Keystone. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pacific Coast and Gulf Keystone.
Diversification Opportunities for Pacific Coast and Gulf Keystone
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Pacific and Gulf is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Pacific Coast Oil and Gulf Keystone Petroleum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gulf Keystone Petroleum and Pacific Coast 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 Pacific Coast Oil are associated (or correlated) with Gulf Keystone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gulf Keystone Petroleum has no effect on the direction of Pacific Coast i.e., Pacific Coast and Gulf Keystone go up and down completely randomly.
Pair Corralation between Pacific Coast and Gulf Keystone
If you would invest 165.00 in Gulf Keystone Petroleum on August 28, 2024 and sell it today you would earn a total of 20.00 from holding Gulf Keystone Petroleum or generate 12.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Pacific Coast Oil vs. Gulf Keystone Petroleum
Performance |
| Timeline |
| Pacific Coast Oil |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Gulf Keystone Petroleum |
Pacific Coast and Gulf Keystone Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pacific Coast and Gulf Keystone
The main advantage of trading using opposite Pacific Coast and Gulf Keystone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pacific Coast position performs unexpectedly, Gulf Keystone 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 Gulf Keystone will offset losses from the drop in Gulf Keystone's long position.| Pacific Coast vs. Gulf Keystone Petroleum | Pacific Coast vs. PetroShale | Pacific Coast vs. ShaMaran Petroleum Corp | Pacific Coast vs. Africa Energy Corp |
| Gulf Keystone vs. Permian Resources | Gulf Keystone vs. Devon Energy | Gulf Keystone vs. EOG Resources | Gulf Keystone vs. Coterra 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 Stocks Directory module to find actively traded stocks across global markets.
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