Correlation Between Gulfport Energy and ConocoPhillips
Can any of the company-specific risk be diversified away by investing in both Gulfport Energy and ConocoPhillips 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 Gulfport Energy and ConocoPhillips into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gulfport Energy Operating and ConocoPhillips, you can compare the effects of market volatilities on Gulfport Energy and ConocoPhillips 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 Gulfport Energy with a short position of ConocoPhillips. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gulfport Energy and ConocoPhillips.
Diversification Opportunities for Gulfport Energy and ConocoPhillips
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Gulfport and ConocoPhillips is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Gulfport Energy Operating and ConocoPhillips in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ConocoPhillips and Gulfport 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 Gulfport Energy Operating are associated (or correlated) with ConocoPhillips. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ConocoPhillips has no effect on the direction of Gulfport Energy i.e., Gulfport Energy and ConocoPhillips go up and down completely randomly.
Pair Corralation between Gulfport Energy and ConocoPhillips
Given the investment horizon of 90 days Gulfport Energy Operating is expected to under-perform the ConocoPhillips. In addition to that, Gulfport Energy is 1.14 times more volatile than ConocoPhillips. It trades about -0.1 of its total potential returns per unit of risk. ConocoPhillips is currently generating about 0.16 per unit of volatility. If you would invest 12,623 in ConocoPhillips on January 24, 2024 and sell it today you would earn a total of 310.00 from holding ConocoPhillips or generate 2.46% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 95.24% |
Values | Daily Returns |
Gulfport Energy Operating vs. ConocoPhillips
Performance |
Timeline |
Gulfport Energy Operating |
ConocoPhillips |
Gulfport Energy and ConocoPhillips Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Gulfport Energy and ConocoPhillips
The main advantage of trading using opposite Gulfport Energy and ConocoPhillips positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gulfport Energy position performs unexpectedly, ConocoPhillips 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 ConocoPhillips will offset losses from the drop in ConocoPhillips' long position.Gulfport Energy vs. Epsilon Energy | Gulfport Energy vs. Granite Ridge Resources | Gulfport Energy vs. SilverBow Resources | Gulfport Energy vs. North European Oil |
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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 Global Correlations module to find global opportunities by holding instruments from different markets.
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