Correlation Between QEP Resources and SM Energy
Can any of the company-specific risk be diversified away by investing in both QEP Resources and SM 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 QEP Resources and SM Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between QEP Resources and SM Energy Co, you can compare the effects of market volatilities on QEP Resources and SM 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 QEP Resources with a short position of SM Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of QEP Resources and SM Energy.
Diversification Opportunities for QEP Resources and SM Energy
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between QEP and SM Energy is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding QEP Resources and SM Energy Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SM Energy and QEP Resources 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 QEP Resources are associated (or correlated) with SM Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SM Energy has no effect on the direction of QEP Resources i.e., QEP Resources and SM Energy go up and down completely randomly.
Pair Corralation between QEP Resources and SM Energy
If you would invest 4,947 in SM Energy Co on January 25, 2024 and sell it today you would earn a total of 34.00 from holding SM Energy Co or generate 0.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
QEP Resources vs. SM Energy Co
Performance |
| Timeline |
| QEP Resources |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| SM Energy |
QEP Resources and SM Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with QEP Resources and SM Energy
The main advantage of trading using opposite QEP Resources and SM Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if QEP Resources position performs unexpectedly, SM 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 SM Energy will offset losses from the drop in SM Energy's long position.| QEP Resources vs. Cirmaker Technology | QEP Resources vs. Vacasa Inc | QEP Resources vs. Braskem SA Class | QEP Resources vs. Western Digital |
| SM Energy vs. Vital Energy | SM Energy vs. Permian Resources | SM Energy vs. Matador Resources | SM Energy vs. Obsidian Energy |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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