Correlation Between Southwestern Energy and Whiting Petroleum
Can any of the company-specific risk be diversified away by investing in both Southwestern Energy and Whiting 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 Whiting 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 Whiting Petroleum, you can compare the effects of market volatilities on Southwestern Energy and Whiting 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 Whiting Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Southwestern Energy and Whiting Petroleum.
Diversification Opportunities for Southwestern Energy and Whiting Petroleum
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Southwestern and Whiting is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Southwestern Energy and Whiting Petroleum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Whiting 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 Whiting Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Whiting Petroleum has no effect on the direction of Southwestern Energy i.e., Southwestern Energy and Whiting Petroleum go up and down completely randomly.
Pair Corralation between Southwestern Energy and Whiting Petroleum
If you would invest 736.00 in Southwestern Energy on January 25, 2024 and sell it today you would earn a total of 3.00 from holding Southwestern Energy or generate 0.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Southwestern Energy vs. Whiting Petroleum
Performance |
| Timeline |
| Southwestern Energy |
| Whiting Petroleum |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Southwestern Energy and Whiting Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Southwestern Energy and Whiting Petroleum
The main advantage of trading using opposite Southwestern Energy and Whiting Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Southwestern Energy position performs unexpectedly, Whiting 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 Whiting Petroleum will offset losses from the drop in Whiting 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 |
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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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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