Correlation Between ShaMaran Petroleum and Gulf Keystone
Can any of the company-specific risk be diversified away by investing in both ShaMaran Petroleum and Gulf Keystone 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 ShaMaran Petroleum and Gulf Keystone into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ShaMaran Petroleum Corp and Gulf Keystone Petroleum, you can compare the effects of market volatilities on ShaMaran Petroleum and Gulf Keystone 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 ShaMaran Petroleum with a short position of Gulf Keystone. Check out your portfolio center. Please also check ongoing floating volatility patterns of ShaMaran Petroleum and Gulf Keystone.
Diversification Opportunities for ShaMaran Petroleum and Gulf Keystone
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ShaMaran and Gulf is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding ShaMaran Petroleum Corp and Gulf Keystone Petroleum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gulf Keystone Petroleum and ShaMaran Petroleum 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 ShaMaran Petroleum Corp are associated (or correlated) with Gulf Keystone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gulf Keystone Petroleum has no effect on the direction of ShaMaran Petroleum i.e., ShaMaran Petroleum and Gulf Keystone go up and down completely randomly.
Pair Corralation between ShaMaran Petroleum and Gulf Keystone
Assuming the 90 days horizon ShaMaran Petroleum Corp is expected to generate 1.71 times more return on investment than Gulf Keystone. However, ShaMaran Petroleum is 1.71 times more volatile than Gulf Keystone Petroleum. It trades about 0.06 of its potential returns per unit of risk. Gulf Keystone Petroleum is currently generating about 0.03 per unit of risk. If you would invest 5.00 in ShaMaran Petroleum Corp on August 31, 2024 and sell it today you would earn a total of 3.00 from holding ShaMaran Petroleum Corp or generate 60.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.73% |
| Values | Daily Returns |
ShaMaran Petroleum Corp vs. Gulf Keystone Petroleum
Performance |
| Timeline |
| ShaMaran Petroleum Corp |
| Gulf Keystone Petroleum |
ShaMaran Petroleum and Gulf Keystone Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ShaMaran Petroleum and Gulf Keystone
The main advantage of trading using opposite ShaMaran Petroleum and Gulf Keystone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ShaMaran Petroleum position performs unexpectedly, Gulf Keystone 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 Gulf Keystone will offset losses from the drop in Gulf Keystone's long position.| ShaMaran Petroleum vs. Petroleo Brasileiro Petrobras | ShaMaran Petroleum vs. Equinor ASA ADR | ShaMaran Petroleum vs. Eni SpA ADR | ShaMaran Petroleum vs. YPF Sociedad Anonima |
| Gulf Keystone vs. San Leon Energy | Gulf Keystone vs. Enwell Energy plc | Gulf Keystone vs. Dno ASA | Gulf Keystone vs. Questerre 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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