Correlation Between Buru Energy and Santa Fe

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Can any of the company-specific risk be diversified away by investing in both Buru Energy and Santa Fe 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 Buru Energy and Santa Fe into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Buru Energy Limited and Santa Fe Petroleum, you can compare the effects of market volatilities on Buru Energy and Santa Fe 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 Buru Energy with a short position of Santa Fe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Buru Energy and Santa Fe.

Diversification Opportunities for Buru Energy and Santa Fe

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Buru and Santa is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Buru Energy Limited and Santa Fe Petroleum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Santa Fe Petroleum and Buru 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 Buru Energy Limited are associated (or correlated) with Santa Fe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Santa Fe Petroleum has no effect on the direction of Buru Energy i.e., Buru Energy and Santa Fe go up and down completely randomly.

Pair Corralation between Buru Energy and Santa Fe

If you would invest  0.01  in Santa Fe Petroleum on November 2, 2024 and sell it today you would earn a total of  0.00  from holding Santa Fe Petroleum or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Buru Energy Limited  vs.  Santa Fe Petroleum

 Performance 
       Timeline  
Buru Energy Limited 

Risk-Adjusted Performance

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Very Weak
Over the last 90 days Buru Energy Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.
Santa Fe Petroleum 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Santa Fe Petroleum has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Santa Fe is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Buru Energy and Santa Fe Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Buru Energy and Santa Fe

The main advantage of trading using opposite Buru Energy and Santa Fe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Buru Energy position performs unexpectedly, Santa Fe 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 Santa Fe will offset losses from the drop in Santa Fe's long position.
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The idea behind Buru Energy Limited and Santa Fe Petroleum 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.
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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.

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