Correlation Between Gulfport Energy and Montage Resources

Can any of the company-specific risk be diversified away by investing in both Gulfport Energy and Montage Resources 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 Montage Resources 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 Montage Resources, you can compare the effects of market volatilities on Gulfport Energy and Montage Resources 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 Montage Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gulfport Energy and Montage Resources.

Diversification Opportunities for Gulfport Energy and Montage Resources

0.0

Correlation Coefficient

Gulfport Energy  Montage Resources

Pay attention - limited upside

The 3 months correlation between Gulfport and Montage is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Gulfport Energy Operating and Montage Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Montage Resources 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 Montage Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Montage Resources has no effect on the direction of Gulfport Energy i.e., Gulfport Energy and Montage Resources go up and down completely randomly.

Pair Corralation between Gulfport Energy and Montage Resources

If you would invest (100.00) in Montage Resources on January 24, 2024 and sell it today you would earn a total of  100.00  from holding Montage Resources or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Gulfport Energy Operating  vs.  Montage Resources

Gulfport Energy Operating

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Gulfport Energy Operating are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating basic indicators, Gulfport Energy reported solid returns over the last few months and may actually be approaching a breakup point.

Montage Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Montage Resources has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Montage Resources is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Gulfport Energy and Montage Resources

The main advantage of trading using opposite Gulfport Energy and Montage Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gulfport Energy position performs unexpectedly, Montage Resources 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 Montage Resources will offset losses from the drop in Montage Resources' long position.

The idea behind Gulfport Energy Operating and Montage Resources pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.