Correlation Between SandRidge Energy and Delta Oil
Can any of the company-specific risk be diversified away by investing in both SandRidge Energy and Delta 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 SandRidge Energy and Delta Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SandRidge Energy and Delta Oil Gas, you can compare the effects of market volatilities on SandRidge Energy and Delta 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 SandRidge Energy with a short position of Delta Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of SandRidge Energy and Delta Oil.
Diversification Opportunities for SandRidge Energy and Delta Oil
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between SandRidge and Delta is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding SandRidge Energy and Delta Oil Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delta Oil Gas 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 Delta Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delta Oil Gas has no effect on the direction of SandRidge Energy i.e., SandRidge Energy and Delta Oil go up and down completely randomly.
Pair Corralation between SandRidge Energy and Delta Oil
Allowing for the 90-day total investment horizon SandRidge Energy is expected to generate 0.15 times more return on investment than Delta Oil. However, SandRidge Energy is 6.78 times less risky than Delta Oil. It trades about -0.04 of its potential returns per unit of risk. Delta Oil Gas is currently generating about -0.12 per unit of risk. If you would invest 1,227 in SandRidge Energy on September 5, 2024 and sell it today you would lose (63.00) from holding SandRidge Energy or give up 5.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SandRidge Energy vs. Delta Oil Gas
Performance |
| Timeline |
| SandRidge Energy |
| Delta Oil Gas |
SandRidge Energy and Delta Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SandRidge Energy and Delta Oil
The main advantage of trading using opposite SandRidge Energy and Delta Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SandRidge Energy position performs unexpectedly, Delta 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 Delta Oil will offset losses from the drop in Delta Oil's long position.| SandRidge Energy vs. Range Resources Corp | SandRidge Energy vs. SM Energy Co | SandRidge Energy vs. Northern Oil Gas |
| Delta Oil vs. Antero Resources Corp | Delta Oil vs. Empire Petroleum Corp | Delta Oil vs. Permian Resources | Delta Oil vs. SandRidge Energy |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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