Correlation Between SM Energy and Kodiak Energy
Can any of the company-specific risk be diversified away by investing in both SM Energy and Kodiak 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 SM Energy and Kodiak Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SM Energy Co and Kodiak Energy, you can compare the effects of market volatilities on SM Energy and Kodiak 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 SM Energy with a short position of Kodiak Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of SM Energy and Kodiak Energy.
Diversification Opportunities for SM Energy and Kodiak Energy
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between SM Energy and Kodiak is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SM Energy Co and Kodiak Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kodiak Energy and SM 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 SM Energy Co are associated (or correlated) with Kodiak Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kodiak Energy has no effect on the direction of SM Energy i.e., SM Energy and Kodiak Energy go up and down completely randomly.
Pair Corralation between SM Energy and Kodiak Energy
Allowing for the 90-day total investment horizon SM Energy is expected to generate 88.5 times less return on investment than Kodiak Energy. But when comparing it to its historical volatility, SM Energy Co is 40.22 times less risky than Kodiak Energy. It trades about 0.04 of its potential returns per unit of risk. Kodiak Energy is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 0.00 in Kodiak Energy on September 3, 2024 and sell it today you would earn a total of 0.00 from holding Kodiak Energy or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 61.05% |
| Values | Daily Returns |
SM Energy Co vs. Kodiak Energy
Performance |
| Timeline |
| SM Energy |
| Kodiak Energy |
SM Energy and Kodiak Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SM Energy and Kodiak Energy
The main advantage of trading using opposite SM Energy and Kodiak Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SM Energy position performs unexpectedly, Kodiak 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 Kodiak Energy will offset losses from the drop in Kodiak Energy's long position.| SM Energy vs. Granite Ridge Resources | SM Energy vs. North European Oil | SM Energy vs. CNX Resources Corp | SM Energy vs. GeoPark |
| Kodiak Energy vs. CNX Resources Corp | Kodiak Energy vs. MV Oil Trust | Kodiak Energy vs. San Juan Basin | Kodiak Energy vs. VOC Energy Trust |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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