Correlation Between Southwestern Energy and Evolution Petroleum
Can any of the company-specific risk be diversified away by investing in both Southwestern Energy and Evolution Petroleum 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 Southwestern Energy and Evolution Petroleum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Southwestern Energy and Evolution Petroleum, you can compare the effects of market volatilities on Southwestern Energy and Evolution Petroleum 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 Southwestern Energy with a short position of Evolution Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Southwestern Energy and Evolution Petroleum.
Diversification Opportunities for Southwestern Energy and Evolution Petroleum
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Southwestern and Evolution is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Southwestern Energy and Evolution Petroleum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evolution Petroleum and Southwestern 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 Southwestern Energy are associated (or correlated) with Evolution Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evolution Petroleum has no effect on the direction of Southwestern Energy i.e., Southwestern Energy and Evolution Petroleum go up and down completely randomly.
Pair Corralation between Southwestern Energy and Evolution Petroleum
If you would invest 519.00 in Evolution Petroleum on August 29, 2024 and sell it today you would earn a total of 55.00 from holding Evolution Petroleum or generate 10.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
Southwestern Energy vs. Evolution Petroleum
Performance |
| Timeline |
| Southwestern Energy |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
| Evolution Petroleum |
Southwestern Energy and Evolution Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Southwestern Energy and Evolution Petroleum
The main advantage of trading using opposite Southwestern Energy and Evolution Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Southwestern Energy position performs unexpectedly, Evolution Petroleum 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 Evolution Petroleum will offset losses from the drop in Evolution Petroleum's long position.| Southwestern Energy vs. Antero Resources Corp | Southwestern Energy vs. EQT Corporation | Southwestern Energy vs. Matador Resources | Southwestern Energy vs. Range Resources Corp |
| Evolution Petroleum vs. GeoPark | Evolution Petroleum vs. Granite Ridge Resources | Evolution Petroleum vs. PHX Minerals | Evolution Petroleum vs. California Resources Corp |
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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