Correlation Between San Juan and Gulfport Energy

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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

SanGulfportDiversified AwaySanGulfportDiversified Away100%
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 Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

San Juan Basin  vs.  Gulfport Energy Operating

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -505101520
JavaScript chart by amCharts 3.21.15SJT GPOR
       Timeline  
San Juan Basin 

Risk-Adjusted Performance

OK

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in San Juan Basin are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak forward-looking indicators, San Juan unveiled solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb44.555.5
Gulfport Energy Operating 

Risk-Adjusted Performance

Insignificant

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Gulfport Energy Operating are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Gulfport Energy is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb165170175180185190195200

San Juan and Gulfport Energy Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-11.65-8.72-5.8-2.870.02.936.019.0812.1615.24 0.020.040.060.08
JavaScript chart by amCharts 3.21.15SJT GPOR
       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.
The idea behind San Juan Basin and Gulfport Energy Operating pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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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