Correlation Between ConocoPhillips and SandRidge Energy
Can any of the company-specific risk be diversified away by investing in both ConocoPhillips and SandRidge 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 ConocoPhillips and SandRidge Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ConocoPhillips and SandRidge Energy, you can compare the effects of market volatilities on ConocoPhillips and SandRidge 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 ConocoPhillips with a short position of SandRidge Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of ConocoPhillips and SandRidge Energy.
Diversification Opportunities for ConocoPhillips and SandRidge Energy
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ConocoPhillips and SandRidge is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding ConocoPhillips and SandRidge Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SandRidge Energy and ConocoPhillips 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 ConocoPhillips are associated (or correlated) with SandRidge Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SandRidge Energy has no effect on the direction of ConocoPhillips i.e., ConocoPhillips and SandRidge Energy go up and down completely randomly.
Pair Corralation between ConocoPhillips and SandRidge Energy
Considering the 90-day investment horizon ConocoPhillips is expected to generate 1.34 times less return on investment than SandRidge Energy. But when comparing it to its historical volatility, ConocoPhillips is 1.4 times less risky than SandRidge Energy. It trades about 0.14 of its potential returns per unit of risk. SandRidge Energy is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 990.00 in SandRidge Energy on May 26, 2025 and sell it today you would earn a total of 186.00 from holding SandRidge Energy or generate 18.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ConocoPhillips vs. SandRidge Energy
Performance |
| Timeline |
| ConocoPhillips |
| SandRidge Energy |
ConocoPhillips and SandRidge Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ConocoPhillips and SandRidge Energy
The main advantage of trading using opposite ConocoPhillips and SandRidge Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ConocoPhillips position performs unexpectedly, SandRidge 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 SandRidge Energy will offset losses from the drop in SandRidge Energy's long position.| ConocoPhillips vs. EOG Resources | ConocoPhillips vs. Devon Energy | ConocoPhillips vs. Diamondback Energy | ConocoPhillips vs. Chevron Corp |
| SandRidge Energy vs. Vital Energy | SandRidge Energy vs. Journey Energy | SandRidge Energy vs. Journey Energy | SandRidge Energy vs. Sitio Royalties Corp |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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