Correlation Between MV Oil and Gulfport Energy

Can any of the company-specific risk be diversified away by investing in both MV Oil and Gulfport 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 MV Oil and Gulfport Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between MV Oil Trust and Gulfport Energy Operating, you can compare the effects of market volatilities on MV Oil and Gulfport 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 MV Oil with a short position of Gulfport Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of MV Oil and Gulfport Energy.

Diversification Opportunities for MV Oil and Gulfport Energy

0.27

Correlation Coefficient

MV Oil  Gulfport Energy

Modest diversification

The 3 months correlation between MVO and Gulfport is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding MV Oil Trust and Gulfport Energy Operating in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gulfport Energy Operating and MV Oil 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 MV Oil Trust are associated (or correlated) with Gulfport Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gulfport Energy Operating has no effect on the direction of MV Oil i.e., MV Oil and Gulfport Energy go up and down completely randomly.

Pair Corralation between MV Oil and Gulfport Energy

Considering the 90-day investment horizon MV Oil Trust is expected to under-perform the Gulfport Energy. In addition to that, MV Oil is 1.99 times more volatile than Gulfport Energy Operating. It trades about -0.07 of its total potential returns per unit of risk. Gulfport Energy Operating is currently generating about 0.03 per unit of volatility. If you would invest  18,150  in Gulfport Energy Operating on December 28, 2024 and sell it today you would earn a total of  491.00  from holding Gulfport Energy Operating or generate 2.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

MV Oil Trust  vs.  Gulfport Energy Operating

MV Oil Trust

Risk-Adjusted Performance

Very Weak

Over the last 90 days MV Oil Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Gulfport Energy Operating

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Gulfport Energy Operating are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Gulfport Energy is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with MV Oil and Gulfport Energy

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

The idea behind MV Oil Trust and Gulfport Energy Operating 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.