Correlation Between Gear Energy and Saturn Oil
Can any of the company-specific risk be diversified away by investing in both Gear 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 Gear 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 Gear Energy and Saturn Oil Gas, you can compare the effects of market volatilities on Gear 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 Gear Energy with a short position of Saturn Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gear Energy and Saturn Oil.
Diversification Opportunities for Gear Energy and Saturn Oil
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Gear and Saturn is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Gear Energy 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 Gear 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 Gear Energy 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 Gear Energy i.e., Gear Energy and Saturn Oil go up and down completely randomly.
Pair Corralation between Gear Energy and Saturn Oil
Assuming the 90 days horizon Gear Energy is expected to under-perform the Saturn Oil. But the otc stock apears to be less risky and, when comparing its historical volatility, Gear Energy is 1.03 times less risky than Saturn Oil. The otc stock trades about -0.05 of its potential returns per unit of risk. The Saturn Oil Gas is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 190.00 in Saturn Oil Gas on August 29, 2024 and sell it today you would lose (30.00) from holding Saturn Oil Gas or give up 15.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.21% |
| Values | Daily Returns |
Gear Energy vs. Saturn Oil Gas
Performance |
| Timeline |
| Gear Energy |
| Saturn Oil Gas |
Gear Energy and Saturn Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gear Energy and Saturn Oil
The main advantage of trading using opposite Gear Energy and Saturn Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gear 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.| Gear Energy vs. Tamarack Valley Energy | Gear Energy vs. MEG Energy Corp | Gear Energy vs. Cardinal Energy | Gear Energy vs. Whitecap Resources |
| Saturn Oil vs. Permian Resources | Saturn Oil vs. Devon Energy | Saturn Oil vs. EOG Resources | Saturn Oil vs. Coterra 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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