Correlation Between CGX Energy and Sintana Energy
Can any of the company-specific risk be diversified away by investing in both CGX Energy and Sintana 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 CGX Energy and Sintana Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CGX Energy and Sintana Energy, you can compare the effects of market volatilities on CGX Energy and Sintana 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 CGX Energy with a short position of Sintana Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of CGX Energy and Sintana Energy.
Diversification Opportunities for CGX Energy and Sintana Energy
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CGX and Sintana is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding CGX Energy and Sintana Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sintana Energy and CGX 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 CGX Energy are associated (or correlated) with Sintana Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sintana Energy has no effect on the direction of CGX Energy i.e., CGX Energy and Sintana Energy go up and down completely randomly.
Pair Corralation between CGX Energy and Sintana Energy
Assuming the 90 days horizon CGX Energy is expected to under-perform the Sintana Energy. But the pink sheet apears to be less risky and, when comparing its historical volatility, CGX Energy is 1.02 times less risky than Sintana Energy. The pink sheet trades about -0.03 of its potential returns per unit of risk. The Sintana Energy is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 8.10 in Sintana Energy on August 30, 2024 and sell it today you would earn a total of 61.90 from holding Sintana Energy or generate 764.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CGX Energy vs. Sintana Energy
Performance |
| Timeline |
| CGX Energy |
| Sintana Energy |
CGX Energy and Sintana Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CGX Energy and Sintana Energy
The main advantage of trading using opposite CGX Energy and Sintana Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CGX Energy position performs unexpectedly, Sintana 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 Sintana Energy will offset losses from the drop in Sintana Energy's long position.| CGX Energy vs. Yamaha Motor Co | CGX Energy vs. Nitto Denko Corp | CGX Energy vs. Farmers Merchants Bancorp | CGX Energy vs. Furukawa Electric Co |
| Sintana Energy vs. Kiwetinohk Energy Corp | Sintana Energy vs. Melbana Energy Limited | Sintana Energy vs. Pancontinental Oil Gas | Sintana Energy vs. Eco Oil Gas |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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