Correlation Between Southwestern Energy and Anadarko Petroleum
Can any of the company-specific risk be diversified away by investing in both Southwestern 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 Southwestern 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 Southwestern Energy and Anadarko Petroleum, you can compare the effects of market volatilities on Southwestern 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 Southwestern Energy with a short position of Anadarko Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Southwestern Energy and Anadarko Petroleum.
Diversification Opportunities for Southwestern Energy and Anadarko Petroleum
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Southwestern and Anadarko is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Southwestern Energy and Anadarko Petroleum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anadarko Petroleum 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 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 Southwestern Energy i.e., Southwestern Energy and Anadarko Petroleum go up and down completely randomly.
Pair Corralation between Southwestern Energy and Anadarko Petroleum
If you would invest 736.00 in Southwestern Energy on January 24, 2024 and sell it today you would earn a total of 4.00 from holding Southwestern Energy or generate 0.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Southwestern Energy vs. Anadarko Petroleum
Performance |
| Timeline |
| Southwestern Energy |
| Anadarko Petroleum |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Southwestern Energy and Anadarko Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Southwestern Energy and Anadarko Petroleum
The main advantage of trading using opposite Southwestern Energy and Anadarko Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Southwestern 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.| Southwestern Energy vs. Antero Resources Corp | Southwestern Energy vs. Chesapeake Energy Corp | Southwestern Energy vs. EQT Corporation | Southwestern Energy vs. Matador Resources |
| Anadarko Petroleum vs. Ultra Clean Holdings | Anadarko Petroleum vs. BioNTech SE | Anadarko Petroleum vs. RadNet Inc | Anadarko Petroleum vs. enVVeno Medical 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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