Correlation Between SilverBow Resources and Northern Oil
Can any of the company-specific risk be diversified away by investing in both SilverBow Resources and Northern Oil 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 Northern Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SilverBow Resources and Northern Oil Gas, you can compare the effects of market volatilities on SilverBow Resources and Northern Oil 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 Northern Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of SilverBow Resources and Northern Oil.
Diversification Opportunities for SilverBow Resources and Northern Oil
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SilverBow and Northern is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding SilverBow Resources and Northern Oil Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northern Oil Gas 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 Northern Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northern Oil Gas has no effect on the direction of SilverBow Resources i.e., SilverBow Resources and Northern Oil go up and down completely randomly.
Pair Corralation between SilverBow Resources and Northern Oil
Given the investment horizon of 90 days SilverBow Resources is expected to under-perform the Northern Oil. In addition to that, SilverBow Resources is 2.58 times more volatile than Northern Oil Gas. It trades about -0.02 of its total potential returns per unit of risk. Northern Oil Gas is currently generating about 0.04 per unit of volatility. If you would invest 3,004 in Northern Oil Gas on August 27, 2024 and sell it today you would earn a total of 1,316 from holding Northern Oil Gas or generate 43.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 83.47% |
| Values | Daily Returns |
SilverBow Resources vs. Northern Oil Gas
Performance |
| Timeline |
| SilverBow Resources |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Northern Oil Gas |
SilverBow Resources and Northern Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SilverBow Resources and Northern Oil
The main advantage of trading using opposite SilverBow Resources and Northern Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SilverBow Resources position performs unexpectedly, Northern Oil 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 Northern Oil will offset losses from the drop in Northern Oil's long position.| SilverBow Resources vs. Vital Energy | SilverBow Resources vs. Permian Resources | SilverBow Resources vs. Magnolia Oil Gas | SilverBow Resources vs. Ring Energy |
| Northern Oil vs. Devon Energy | Northern Oil vs. ConocoPhillips | Northern Oil vs. Occidental Petroleum | Northern Oil vs. Permian Resources |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
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| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |