Correlation Between SM Energy and QEP Resources

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both SM Energy and QEP 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 SM Energy and QEP Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SM Energy Co and QEP Resources, you can compare the effects of market volatilities on SM Energy and QEP 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 SM Energy with a short position of QEP Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of SM Energy and QEP Resources.

Diversification Opportunities for SM Energy and QEP Resources

0.0
  Correlation Coefficient

Pay attention - limited upside

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

Pair Corralation between SM Energy and QEP Resources

If you would invest  4,284  in SM Energy Co on December 29, 2023 and sell it today you would earn a total of  621.00  from holding SM Energy Co or generate 14.5% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

SM Energy Co  vs.  QEP Resources

 Performance 
       Timeline  
SM Energy 

Risk-Adjusted Performance

18 of 100

 
Low
 
High
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in SM Energy Co are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of very weak primary indicators, SM Energy displayed solid returns over the last few months and may actually be approaching a breakup point.
QEP Resources 

Risk-Adjusted Performance

0 of 100

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

SM Energy and QEP Resources Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with SM Energy and QEP Resources

The main advantage of trading using opposite SM Energy and QEP Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SM Energy position performs unexpectedly, QEP 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 QEP Resources will offset losses from the drop in QEP Resources' long position.
The idea behind SM Energy Co and QEP 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.

Other Complementary Tools

Portfolio Dashboard
Portfolio dashboard that provides centralized access to all your investments
Options Analysis
Analyze and evaluate options and option chains as a potential hedge for your portfolios
Price Ceiling Movement
Calculate and plot Price Ceiling Movement for different equity instruments
Alpha Finder
Use alpha and beta coefficients to find investment opportunities after accounting for the risk
Portfolio Diagnostics
Use generated alerts and portfolio events aggregator to diagnose current holdings
Portfolio Rebalancing
Analyze risk-adjusted returns against different time horizons to find asset-allocation targets
AI Investment Finder
Use AI to screen and filter profitable investment opportunities