Correlation Between SandRidge Energy and Canadian Natural
Can any of the company-specific risk be diversified away by investing in both SandRidge Energy and Canadian Natural 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 Canadian Natural into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SandRidge Energy and Canadian Natural Resources, you can compare the effects of market volatilities on SandRidge Energy and Canadian Natural 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 Canadian Natural. Check out your portfolio center. Please also check ongoing floating volatility patterns of SandRidge Energy and Canadian Natural.
Diversification Opportunities for SandRidge Energy and Canadian Natural
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SandRidge and Canadian is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding SandRidge Energy and Canadian Natural Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canadian Natural Res 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 Canadian Natural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canadian Natural Res has no effect on the direction of SandRidge Energy i.e., SandRidge Energy and Canadian Natural go up and down completely randomly.
Pair Corralation between SandRidge Energy and Canadian Natural
Allowing for the 90-day total investment horizon SandRidge Energy is expected to generate 5.48 times less return on investment than Canadian Natural. In addition to that, SandRidge Energy is 1.19 times more volatile than Canadian Natural Resources. It trades about 0.0 of its total potential returns per unit of risk. Canadian Natural Resources is currently generating about 0.03 per unit of volatility. If you would invest 2,653 in Canadian Natural Resources on October 9, 2024 and sell it today you would earn a total of 572.00 from holding Canadian Natural Resources or generate 21.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SandRidge Energy vs. Canadian Natural Resources
Performance |
| Timeline |
| SandRidge Energy |
| Canadian Natural Res |
SandRidge Energy and Canadian Natural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SandRidge Energy and Canadian Natural
The main advantage of trading using opposite SandRidge Energy and Canadian Natural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SandRidge Energy position performs unexpectedly, Canadian Natural 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 Canadian Natural will offset losses from the drop in Canadian Natural's long position.| SandRidge Energy vs. Range Resources Corp | SandRidge Energy vs. SM Energy Co | SandRidge Energy vs. Northern Oil Gas |
| Canadian Natural vs. Baytex Energy Corp | Canadian Natural vs. Vermilion Energy | Canadian Natural vs. Obsidian Energy | Canadian Natural vs. Ovintiv |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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