Correlation Between San Juan and Gulfport Energy
Can any of the company-specific risk be diversified away by investing in both San Juan and Gulfport 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 San Juan and Gulfport Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between San Juan Basin and Gulfport Energy Operating, you can compare the effects of market volatilities on San Juan and Gulfport 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 San Juan with a short position of Gulfport Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of San Juan and Gulfport Energy.
Diversification Opportunities for San Juan and Gulfport Energy
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between San and Gulfport is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding San Juan Basin and Gulfport Energy Operating in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gulfport Energy Operating and San Juan 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 San Juan Basin are associated (or correlated) with Gulfport Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gulfport Energy Operating has no effect on the direction of San Juan i.e., San Juan and Gulfport Energy go up and down completely randomly.
Pair Corralation between San Juan and Gulfport Energy
Considering the 90-day investment horizon San Juan Basin is expected to under-perform the Gulfport Energy. In addition to that, San Juan is 1.35 times more volatile than Gulfport Energy Operating. It trades about -0.03 of its total potential returns per unit of risk. Gulfport Energy Operating is currently generating about 0.09 per unit of volatility. If you would invest 7,783 in Gulfport Energy Operating on November 26, 2024 and sell it today you would earn a total of 10,447 from holding Gulfport Energy Operating or generate 134.23% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
San Juan Basin vs. Gulfport Energy Operating
Performance |
Timeline |
San Juan Basin |
Gulfport Energy Operating |
San Juan and Gulfport Energy Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with San Juan and Gulfport Energy
The main advantage of trading using opposite San Juan and Gulfport Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if San Juan position performs unexpectedly, Gulfport 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 Gulfport Energy will offset losses from the drop in Gulfport Energy's long position.San Juan vs. Sabine Royalty Trust | ||
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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