Kensho Stats

These oversold energy stocks could be ready to rebound

David Turnley | Corbis | VCG | Getty Images

The Dow Jones Industrial Average eked out another all-time-high on Friday — its 11th record close in a row.

The S&P 500 also notched a new high and its longest winning streak in nearly a year.

But not all areas of the market are participating. Energy, the worst performing sector in the S&P this year, is down nearly 7 percent.

Using hedge fund analytics tool Kensho, CNBC looked for the most statistically oversold stocks in the energy sector, as measured by the stock's standard deviation.

Standard deviation is a measure of how spread out a data set is from its mean. In this exercise, the mean is defined as the stock's 50-day moving average.

From that statistical standpoint, the most oversold Energy stocks are Range Resources, Anadarko Petroleum, Newfield Exploration and Chesapeake Energy.

Kensho points out the most statistically oversold stocks — which also are most likely to see near-term gains.

Take Range Resources, which as of Friday was 3.27 standard deviations below its mean.

To put it into context, 99.7 percent of values along a normally distributed set fall within 3 standard deviations, so a number greater than 3 puts Range Resources in extremely rare trading territory.

Further, Kensho notes that the past seven times Range Resources has had a drop of this magnitude, the next move is at least half a standard deviation higher.

Disclosure: CNBC parent NBC Universal is a minority investor in Kensho