Correlation Between Sound Energy and Guardian Exploration
Can any of the company-specific risk be diversified away by investing in both Sound Energy and Guardian Exploration 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 Sound Energy and Guardian Exploration into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sound Energy plc and Guardian Exploration, you can compare the effects of market volatilities on Sound Energy and Guardian Exploration 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 Sound Energy with a short position of Guardian Exploration. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sound Energy and Guardian Exploration.
Diversification Opportunities for Sound Energy and Guardian Exploration
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sound and Guardian is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Sound Energy plc and Guardian Exploration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guardian Exploration and Sound 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 Sound Energy plc are associated (or correlated) with Guardian Exploration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guardian Exploration has no effect on the direction of Sound Energy i.e., Sound Energy and Guardian Exploration go up and down completely randomly.
Pair Corralation between Sound Energy and Guardian Exploration
Assuming the 90 days horizon Sound Energy plc is expected to generate 1.09 times more return on investment than Guardian Exploration. However, Sound Energy is 1.09 times more volatile than Guardian Exploration. It trades about 0.16 of its potential returns per unit of risk. Guardian Exploration is currently generating about 0.13 per unit of risk. If you would invest 1.40 in Sound Energy plc on August 17, 2025 and sell it today you would earn a total of 0.24 from holding Sound Energy plc or generate 17.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.46% |
| Values | Daily Returns |
Sound Energy plc vs. Guardian Exploration
Performance |
| Timeline |
| Sound Energy plc |
| Guardian Exploration |
Sound Energy and Guardian Exploration Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sound Energy and Guardian Exploration
The main advantage of trading using opposite Sound Energy and Guardian Exploration positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sound Energy position performs unexpectedly, Guardian Exploration 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 Guardian Exploration will offset losses from the drop in Guardian Exploration's long position.| Sound Energy vs. Eco Oil Gas | Sound Energy vs. Petro Matad Limited | Sound Energy vs. Guardian Exploration | Sound Energy vs. Altima Resources |
| Guardian Exploration vs. Eco Oil Gas | Guardian Exploration vs. Desert Mountain Energy | Guardian Exploration vs. Jericho Oil Corp | Guardian Exploration vs. Sound Energy plc |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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