Correlation Between Southwestern Energy and Kosmos Energy
Can any of the company-specific risk be diversified away by investing in both Southwestern Energy and Kosmos 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 Kosmos 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 Kosmos Energy, you can compare the effects of market volatilities on Southwestern Energy and Kosmos 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 Kosmos Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Southwestern Energy and Kosmos Energy.
Diversification Opportunities for Southwestern Energy and Kosmos Energy
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Southwestern and Kosmos is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Southwestern Energy and Kosmos Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kosmos Energy 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 Kosmos Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kosmos Energy has no effect on the direction of Southwestern Energy i.e., Southwestern Energy and Kosmos Energy go up and down completely randomly.
Pair Corralation between Southwestern Energy and Kosmos Energy
If you would invest 711.00 in Southwestern Energy on August 29, 2024 and sell it today you would earn a total of 0.00 from holding Southwestern Energy or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 4.35% |
| Values | Daily Returns |
Southwestern Energy vs. Kosmos Energy
Performance |
| Timeline |
| Southwestern Energy |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
| Kosmos Energy |
Southwestern Energy and Kosmos Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Southwestern Energy and Kosmos Energy
The main advantage of trading using opposite Southwestern Energy and Kosmos Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Southwestern Energy position performs unexpectedly, Kosmos 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 Kosmos Energy will offset losses from the drop in Kosmos 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 |
| Kosmos Energy vs. Matador Resources | Kosmos Energy vs. Murphy Oil | Kosmos Energy vs. Civitas Resources | Kosmos Energy vs. Magnolia Oil Gas |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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