Correlation Between Frontera Energy and Saturn Oil
Can any of the company-specific risk be diversified away by investing in both Frontera Energy and Saturn Oil 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 Frontera Energy and Saturn Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Frontera Energy Corp and Saturn Oil Gas, you can compare the effects of market volatilities on Frontera Energy and Saturn Oil 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 Frontera Energy with a short position of Saturn Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Frontera Energy and Saturn Oil.
Diversification Opportunities for Frontera Energy and Saturn Oil
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Frontera and Saturn is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Frontera Energy Corp and Saturn Oil Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saturn Oil Gas and Frontera 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 Frontera Energy Corp are associated (or correlated) with Saturn Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saturn Oil Gas has no effect on the direction of Frontera Energy i.e., Frontera Energy and Saturn Oil go up and down completely randomly.
Pair Corralation between Frontera Energy and Saturn Oil
Assuming the 90 days horizon Frontera Energy Corp is expected to under-perform the Saturn Oil. But the pink sheet apears to be less risky and, when comparing its historical volatility, Frontera Energy Corp is 1.07 times less risky than Saturn Oil. The pink sheet trades about -0.28 of its potential returns per unit of risk. The Saturn Oil Gas is currently generating about -0.11 of returns per unit of risk over similar time horizon. If you would invest 155.00 in Saturn Oil Gas on November 3, 2024 and sell it today you would lose (8.00) from holding Saturn Oil Gas or give up 5.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Frontera Energy Corp vs. Saturn Oil Gas
Performance |
| Timeline |
| Frontera Energy Corp |
| Saturn Oil Gas |
Frontera Energy and Saturn Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Frontera Energy and Saturn Oil
The main advantage of trading using opposite Frontera Energy and Saturn Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Frontera Energy position performs unexpectedly, Saturn Oil 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 Saturn Oil will offset losses from the drop in Saturn Oil's long position.| Frontera Energy vs. CGX Energy | Frontera Energy vs. Athabasca Oil Corp | Frontera Energy vs. Africa Oil Corp | Frontera Energy vs. MEG Energy Corp |
| Saturn Oil vs. San Leon Energy | Saturn Oil vs. Enwell Energy plc | Saturn Oil vs. Dno ASA | Saturn Oil vs. Questerre Energy |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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