Correlation Between SM Energy and QEP Resources
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 Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 0.0% |
Values | Daily Returns |
SM Energy Co vs. QEP Resources
Performance |
Timeline |
SM Energy |
QEP Resources |
Risk-Adjusted Performance
0 of 100
Low | High |
Very Weak
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.SM Energy vs. Antero Resources Corp | SM Energy vs. Empire Petroleum Corp | SM Energy vs. SandRidge Energy | SM Energy vs. Dorchester Minerals LP |
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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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