Correlation Between SandRidge Energy and Alamo Energy
Can any of the company-specific risk be diversified away by investing in both SandRidge Energy and Alamo Energy 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 SandRidge Energy and Alamo Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SandRidge Energy and Alamo Energy Corp, you can compare the effects of market volatilities on SandRidge Energy and Alamo Energy 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 SandRidge Energy with a short position of Alamo Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of SandRidge Energy and Alamo Energy.
Diversification Opportunities for SandRidge Energy and Alamo Energy
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SandRidge and Alamo is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding SandRidge Energy and Alamo Energy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alamo Energy Corp and SandRidge Energy 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 SandRidge Energy are associated (or correlated) with Alamo Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alamo Energy Corp has no effect on the direction of SandRidge Energy i.e., SandRidge Energy and Alamo Energy go up and down completely randomly.
Pair Corralation between SandRidge Energy and Alamo Energy
If you would invest 1,107 in SandRidge Energy on August 28, 2024 and sell it today you would earn a total of 80.00 from holding SandRidge Energy or generate 7.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SandRidge Energy vs. Alamo Energy Corp
Performance |
| Timeline |
| SandRidge Energy |
| Alamo Energy Corp |
SandRidge Energy and Alamo Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SandRidge Energy and Alamo Energy
The main advantage of trading using opposite SandRidge Energy and Alamo Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SandRidge Energy position performs unexpectedly, Alamo Energy 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 Alamo Energy will offset losses from the drop in Alamo Energy's long position.| SandRidge Energy vs. Range Resources Corp | SandRidge Energy vs. SM Energy Co | SandRidge Energy vs. Northern Oil Gas |
| Alamo Energy vs. AER Energy Resources | Alamo Energy vs. Altura Energy | Alamo Energy vs. Arete Industries | Alamo Energy vs. Strat Petroleum |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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