Correlation Between Southwestern Energy and Gulfport Energy
Can any of the company-specific risk be diversified away by investing in both Southwestern Energy 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 Southwestern Energy and Gulfport Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Southwestern Energy and Gulfport Energy Operating, you can compare the effects of market volatilities on Southwestern Energy 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 Southwestern Energy with a short position of Gulfport Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Southwestern Energy and Gulfport Energy.
Diversification Opportunities for Southwestern Energy and Gulfport Energy
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Southwestern and Gulfport is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Southwestern Energy 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 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 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 Southwestern Energy i.e., Southwestern Energy and Gulfport Energy go up and down completely randomly.
Pair Corralation between Southwestern Energy and Gulfport Energy
If you would invest 16,276 in Gulfport Energy Operating on September 13, 2024 and sell it today you would earn a total of 1,669 from holding Gulfport Energy Operating or generate 10.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
Southwestern Energy vs. Gulfport Energy Operating
Performance |
| Timeline |
| Southwestern Energy |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Excellent
| Gulfport Energy Operating |
Southwestern Energy and Gulfport Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Southwestern Energy and Gulfport Energy
The main advantage of trading using opposite Southwestern Energy and Gulfport Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Southwestern Energy 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.| Southwestern Energy vs. Antero Resources Corp | Southwestern Energy vs. EQT Corporation | Southwestern Energy vs. Matador Resources | Southwestern Energy vs. Range Resources Corp |
| Gulfport Energy vs. Epsilon Energy | Gulfport Energy vs. Granite Ridge Resources | Gulfport Energy vs. North European Oil | Gulfport Energy vs. CNX 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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