Correlation Between Tullow Oil and SandRidge Mississippian
Can any of the company-specific risk be diversified away by investing in both Tullow Oil and SandRidge Mississippian 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 Tullow Oil and SandRidge Mississippian into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tullow Oil plc and SandRidge Mississippian Trust, you can compare the effects of market volatilities on Tullow Oil and SandRidge Mississippian 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 Tullow Oil with a short position of SandRidge Mississippian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tullow Oil and SandRidge Mississippian.
Diversification Opportunities for Tullow Oil and SandRidge Mississippian
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Tullow and SandRidge is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Tullow Oil plc and SandRidge Mississippian Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SandRidge Mississippian and Tullow Oil 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 Tullow Oil plc are associated (or correlated) with SandRidge Mississippian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SandRidge Mississippian has no effect on the direction of Tullow Oil i.e., Tullow Oil and SandRidge Mississippian go up and down completely randomly.
Pair Corralation between Tullow Oil and SandRidge Mississippian
Assuming the 90 days horizon Tullow Oil plc is expected to under-perform the SandRidge Mississippian. But the pink sheet apears to be less risky and, when comparing its historical volatility, Tullow Oil plc is 1.7 times less risky than SandRidge Mississippian. The pink sheet trades about 0.0 of its potential returns per unit of risk. The SandRidge Mississippian Trust is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 8.70 in SandRidge Mississippian Trust on September 3, 2024 and sell it today you would lose (2.20) from holding SandRidge Mississippian Trust or give up 25.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 30.91% |
| Values | Daily Returns |
Tullow Oil plc vs. SandRidge Mississippian Trust
Performance |
| Timeline |
| Tullow Oil plc |
| SandRidge Mississippian |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Tullow Oil and SandRidge Mississippian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tullow Oil and SandRidge Mississippian
The main advantage of trading using opposite Tullow Oil and SandRidge Mississippian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tullow Oil position performs unexpectedly, SandRidge Mississippian 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 SandRidge Mississippian will offset losses from the drop in SandRidge Mississippian's long position.| Tullow Oil vs. Dno ASA | Tullow Oil vs. PetroShale | Tullow Oil vs. Horizon Oil Limited | Tullow Oil vs. Enwell Energy plc |
| SandRidge Mississippian vs. PetroShale | SandRidge Mississippian vs. Inpex Corp ADR | SandRidge Mississippian vs. Canacol Energy | SandRidge Mississippian vs. Battalion Oil 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
Other Complementary Tools
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |