Correlation Between Whiting Petroleum and Western Midstream
Can any of the company-specific risk be diversified away by investing in both Whiting Petroleum and Western Midstream 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 Whiting Petroleum and Western Midstream into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Whiting Petroleum and Western Midstream Partners, you can compare the effects of market volatilities on Whiting Petroleum and Western Midstream 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 Whiting Petroleum with a short position of Western Midstream. Check out your portfolio center. Please also check ongoing floating volatility patterns of Whiting Petroleum and Western Midstream.
Diversification Opportunities for Whiting Petroleum and Western Midstream
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Whiting and Western is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Whiting Petroleum and Western Midstream Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Midstream and Whiting Petroleum 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 Whiting Petroleum are associated (or correlated) with Western Midstream. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Midstream has no effect on the direction of Whiting Petroleum i.e., Whiting Petroleum and Western Midstream go up and down completely randomly.
Pair Corralation between Whiting Petroleum and Western Midstream
If you would invest 3,449 in Western Midstream Partners on January 24, 2024 and sell it today you would earn a total of 111.00 from holding Western Midstream Partners or generate 3.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Whiting Petroleum vs. Western Midstream Partners
Performance |
| Timeline |
| Whiting Petroleum |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Western Midstream |
Whiting Petroleum and Western Midstream Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Whiting Petroleum and Western Midstream
The main advantage of trading using opposite Whiting Petroleum and Western Midstream positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Whiting Petroleum position performs unexpectedly, Western Midstream 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 Western Midstream will offset losses from the drop in Western Midstream's long position.| Whiting Petroleum vs. Playtech plc | Whiting Petroleum vs. Marine Products | Whiting Petroleum vs. Arcimoto | Whiting Petroleum vs. Cedar Fair LP |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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