Correlation Between SilverBow Resources and Coastal Caribbean
Can any of the company-specific risk be diversified away by investing in both SilverBow Resources and Coastal Caribbean 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 SilverBow Resources and Coastal Caribbean into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SilverBow Resources and Coastal Caribbean Oils, you can compare the effects of market volatilities on SilverBow Resources and Coastal Caribbean 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 SilverBow Resources with a short position of Coastal Caribbean. Check out your portfolio center. Please also check ongoing floating volatility patterns of SilverBow Resources and Coastal Caribbean.
Diversification Opportunities for SilverBow Resources and Coastal Caribbean
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between SilverBow and Coastal is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding SilverBow Resources and Coastal Caribbean Oils in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coastal Caribbean Oils and SilverBow 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 SilverBow Resources are associated (or correlated) with Coastal Caribbean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coastal Caribbean Oils has no effect on the direction of SilverBow Resources i.e., SilverBow Resources and Coastal Caribbean go up and down completely randomly.
Pair Corralation between SilverBow Resources and Coastal Caribbean
Given the investment horizon of 90 days SilverBow Resources is expected to under-perform the Coastal Caribbean. But the stock apears to be less risky and, when comparing its historical volatility, SilverBow Resources is 13.96 times less risky than Coastal Caribbean. The stock trades about -0.03 of its potential returns per unit of risk. The Coastal Caribbean Oils is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 0.01 in Coastal Caribbean Oils on August 24, 2024 and sell it today you would earn a total of 0.00 from holding Coastal Caribbean Oils or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 38.07% |
| Values | Daily Returns |
SilverBow Resources vs. Coastal Caribbean Oils
Performance |
| Timeline |
| SilverBow Resources |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Coastal Caribbean Oils |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
SilverBow Resources and Coastal Caribbean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SilverBow Resources and Coastal Caribbean
The main advantage of trading using opposite SilverBow Resources and Coastal Caribbean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SilverBow Resources position performs unexpectedly, Coastal Caribbean 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 Coastal Caribbean will offset losses from the drop in Coastal Caribbean's long position.| SilverBow Resources vs. Vital Energy | SilverBow Resources vs. Permian Resources | SilverBow Resources vs. Magnolia Oil Gas | SilverBow Resources vs. Ring Energy |
| Coastal Caribbean vs. Strat Petroleum | Coastal Caribbean vs. Imperial Res | Coastal Caribbean vs. Century Petroleum 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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