Correlation Between Southwestern Energy and Newfield Exploration
Can any of the company-specific risk be diversified away by investing in both Southwestern Energy and Newfield Exploration 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 Newfield Exploration into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Southwestern Energy and Newfield Exploration, you can compare the effects of market volatilities on Southwestern Energy and Newfield Exploration 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 Newfield Exploration. Check out your portfolio center. Please also check ongoing floating volatility patterns of Southwestern Energy and Newfield Exploration.
Diversification Opportunities for Southwestern Energy and Newfield Exploration
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Southwestern and Newfield is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Southwestern Energy and Newfield Exploration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newfield Exploration 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 Newfield Exploration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Newfield Exploration has no effect on the direction of Southwestern Energy i.e., Southwestern Energy and Newfield Exploration go up and down completely randomly.
Pair Corralation between Southwestern Energy and Newfield Exploration
If you would invest 612.00 in Southwestern Energy on December 30, 2023 and sell it today you would earn a total of 146.00 from holding Southwestern Energy or generate 23.86% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 0.0% |
Values | Daily Returns |
Southwestern Energy vs. Newfield Exploration
Performance |
Timeline |
Southwestern Energy |
Newfield Exploration |
Risk-Adjusted Performance
0 of 100
Low | High |
Very Weak
Southwestern Energy and Newfield Exploration Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Southwestern Energy and Newfield Exploration
The main advantage of trading using opposite Southwestern Energy and Newfield Exploration positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Southwestern Energy position performs unexpectedly, Newfield Exploration 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 Newfield Exploration will offset losses from the drop in Newfield Exploration's long position.Southwestern Energy vs. SunOpta | Southwestern Energy vs. Vestis | Southwestern Energy vs. Federal Home Loan | Southwestern Energy vs. Global Ship Lease |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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