Correlation Between Gulfport Energy and Woodside Energy

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

Diversification Opportunities for Gulfport Energy and Woodside Energy

-0.33

Correlation Coefficient

Gulfport Energy  Woodside Energy

Very good diversification

The 3 months correlation between Gulfport and Woodside is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Gulfport Energy Operating and Woodside Energy Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Woodside Energy Group 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 Woodside Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Woodside Energy Group has no effect on the direction of Gulfport Energy i.e., Gulfport Energy and Woodside Energy go up and down completely randomly.

Pair Corralation between Gulfport Energy and Woodside Energy

Given the investment horizon of 90 days Gulfport Energy Operating is expected to generate 1.03 times more return on investment than Woodside Energy. However, Gulfport Energy is 1.03 times more volatile than Woodside Energy Group. It trades about 0.06 of its potential returns per unit of risk. Woodside Energy Group is currently generating about -0.05 per unit of risk. If you would invest  15,525  in Gulfport Energy Operating on September 13, 2024 and sell it today you would earn a total of  2,420  from holding Gulfport Energy Operating or generate 15.59% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Gulfport Energy Operating  vs.  Woodside Energy Group

Gulfport Energy Operating

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Gulfport Energy Operating are ranked lower than 14 (%) 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.

Woodside Energy Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Woodside Energy Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental indicators, Woodside Energy is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Gulfport Energy and Woodside Energy

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

The idea behind Gulfport Energy Operating and Woodside Energy Group 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.