Correlation Between SM Energy and Anadarko Petroleum
Can any of the company-specific risk be diversified away by investing in both SM Energy and Anadarko Petroleum 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 SM Energy and Anadarko Petroleum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SM Energy Co and Anadarko Petroleum, you can compare the effects of market volatilities on SM Energy and Anadarko Petroleum 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 SM Energy with a short position of Anadarko Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of SM Energy and Anadarko Petroleum.
Diversification Opportunities for SM Energy and Anadarko Petroleum
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between SM Energy and Anadarko is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SM Energy Co and Anadarko Petroleum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anadarko Petroleum and SM 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 SM Energy Co are associated (or correlated) with Anadarko Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anadarko Petroleum has no effect on the direction of SM Energy i.e., SM Energy and Anadarko Petroleum go up and down completely randomly.
Pair Corralation between SM Energy and Anadarko Petroleum
If you would invest 4,850 in SM Energy Co on January 26, 2024 and sell it today you would earn a total of 151.00 from holding SM Energy Co or generate 3.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
SM Energy Co vs. Anadarko Petroleum
Performance |
| Timeline |
| SM Energy |
| Anadarko Petroleum |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
SM Energy and Anadarko Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SM Energy and Anadarko Petroleum
The main advantage of trading using opposite SM Energy and Anadarko Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SM Energy position performs unexpectedly, Anadarko Petroleum 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 Anadarko Petroleum will offset losses from the drop in Anadarko Petroleum's long position.| SM Energy vs. Vital Energy | SM Energy vs. Permian Resources | SM Energy vs. Matador Resources | SM Energy vs. Obsidian Energy |
| Anadarko Petroleum vs. Eastman Chemical | Anadarko Petroleum vs. Cadence Design Systems | Anadarko Petroleum vs. CF Industries Holdings | Anadarko Petroleum vs. Sensient Technologies |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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