Correlation Between SandRidge Energy and Cgrowth Capital
Can any of the company-specific risk be diversified away by investing in both SandRidge Energy and Cgrowth Capital 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 Cgrowth Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SandRidge Energy and Cgrowth Capital, you can compare the effects of market volatilities on SandRidge Energy and Cgrowth Capital 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 Cgrowth Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of SandRidge Energy and Cgrowth Capital.
Diversification Opportunities for SandRidge Energy and Cgrowth Capital
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between SandRidge and Cgrowth is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding SandRidge Energy and Cgrowth Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cgrowth Capital 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 Cgrowth Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cgrowth Capital has no effect on the direction of SandRidge Energy i.e., SandRidge Energy and Cgrowth Capital go up and down completely randomly.
Pair Corralation between SandRidge Energy and Cgrowth Capital
Allowing for the 90-day total investment horizon SandRidge Energy is expected to under-perform the Cgrowth Capital. But the stock apears to be less risky and, when comparing its historical volatility, SandRidge Energy is 26.26 times less risky than Cgrowth Capital. The stock trades about -0.05 of its potential returns per unit of risk. The Cgrowth Capital is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 0.20 in Cgrowth Capital on November 3, 2024 and sell it today you would earn a total of 0.04 from holding Cgrowth Capital or generate 20.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SandRidge Energy vs. Cgrowth Capital
Performance |
| Timeline |
| SandRidge Energy |
| Cgrowth Capital |
SandRidge Energy and Cgrowth Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SandRidge Energy and Cgrowth Capital
The main advantage of trading using opposite SandRidge Energy and Cgrowth Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SandRidge Energy position performs unexpectedly, Cgrowth Capital 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 Cgrowth Capital will offset losses from the drop in Cgrowth Capital's long position.| SandRidge Energy vs. Range Resources Corp | SandRidge Energy vs. SM Energy Co | SandRidge Energy vs. Northern Oil Gas |
| Cgrowth Capital vs. Sound Energy plc | Cgrowth Capital vs. Energy Revenue Amer | Cgrowth Capital vs. Prairie Provident Resources | Cgrowth Capital vs. MMEX Resources 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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