Correlation Between Southwestern Energy and Granite Ridge
Can any of the company-specific risk be diversified away by investing in both Southwestern Energy and Granite Ridge 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 Granite Ridge into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Southwestern Energy and Granite Ridge Resources, you can compare the effects of market volatilities on Southwestern Energy and Granite Ridge 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 Granite Ridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Southwestern Energy and Granite Ridge.
Diversification Opportunities for Southwestern Energy and Granite Ridge
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Southwestern and Granite is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Southwestern Energy and Granite Ridge Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Granite Ridge Resources 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 Granite Ridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Granite Ridge Resources has no effect on the direction of Southwestern Energy i.e., Southwestern Energy and Granite Ridge go up and down completely randomly.
Pair Corralation between Southwestern Energy and Granite Ridge
If you would invest 593.00 in Granite Ridge Resources on September 1, 2024 and sell it today you would earn a total of 52.00 from holding Granite Ridge Resources or generate 8.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Southwestern Energy vs. Granite Ridge Resources
Performance |
| Timeline |
| Southwestern Energy |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Strong
| Granite Ridge Resources |
Southwestern Energy and Granite Ridge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Southwestern Energy and Granite Ridge
The main advantage of trading using opposite Southwestern Energy and Granite Ridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Southwestern Energy position performs unexpectedly, Granite Ridge 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 Granite Ridge will offset losses from the drop in Granite Ridge'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 |
| Granite Ridge vs. Epsilon Energy | Granite Ridge vs. Gulfport Energy Operating | Granite Ridge vs. North European Oil | Granite Ridge vs. PHX Minerals |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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