Correlation Between SilverBow Resources and North European
Can any of the company-specific risk be diversified away by investing in both SilverBow Resources and North European 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 North European into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SilverBow Resources and North European Oil, you can compare the effects of market volatilities on SilverBow Resources and North European 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 North European. Check out your portfolio center. Please also check ongoing floating volatility patterns of SilverBow Resources and North European.
Diversification Opportunities for SilverBow Resources and North European
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between SilverBow and North is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding SilverBow Resources and North European Oil in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on North European Oil 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 North European. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of North European Oil has no effect on the direction of SilverBow Resources i.e., SilverBow Resources and North European go up and down completely randomly.
Pair Corralation between SilverBow Resources and North European
Given the investment horizon of 90 days SilverBow Resources is expected to under-perform the North European. In addition to that, SilverBow Resources is 5.0 times more volatile than North European Oil. It trades about -0.16 of its total potential returns per unit of risk. North European Oil is currently generating about -0.12 per unit of volatility. If you would invest 696.00 in North European Oil on August 24, 2024 and sell it today you would lose (276.00) from holding North European Oil or give up 39.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 36.0% |
| Values | Daily Returns |
SilverBow Resources vs. North European Oil
Performance |
| Timeline |
| SilverBow Resources |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| North European Oil |
SilverBow Resources and North European Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SilverBow Resources and North European
The main advantage of trading using opposite SilverBow Resources and North European positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SilverBow Resources position performs unexpectedly, North European 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 North European will offset losses from the drop in North European's long position.| SilverBow Resources vs. Vital Energy | SilverBow Resources vs. Permian Resources | SilverBow Resources vs. Magnolia Oil Gas | SilverBow Resources vs. Ring Energy |
| North European vs. Cross Timbers Royalty | North European vs. VOC Energy Trust | North European vs. Sabine Royalty Trust | North European vs. Permianville Royalty Trust |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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