Correlation Between Africa Energy and ShaMaran Petroleum
Can any of the company-specific risk be diversified away by investing in both Africa Energy and ShaMaran Petroleum 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 Africa Energy and ShaMaran Petroleum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Africa Energy Corp and ShaMaran Petroleum Corp, you can compare the effects of market volatilities on Africa Energy and ShaMaran Petroleum 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 Africa Energy with a short position of ShaMaran Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Africa Energy and ShaMaran Petroleum.
Diversification Opportunities for Africa Energy and ShaMaran Petroleum
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Africa and ShaMaran is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Africa Energy Corp and ShaMaran Petroleum Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ShaMaran Petroleum Corp and Africa 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 Africa Energy Corp are associated (or correlated) with ShaMaran Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ShaMaran Petroleum Corp has no effect on the direction of Africa Energy i.e., Africa Energy and ShaMaran Petroleum go up and down completely randomly.
Pair Corralation between Africa Energy and ShaMaran Petroleum
Assuming the 90 days horizon Africa Energy Corp is expected to under-perform the ShaMaran Petroleum. But the pink sheet apears to be less risky and, when comparing its historical volatility, Africa Energy Corp is 1.35 times less risky than ShaMaran Petroleum. The pink sheet trades about -0.02 of its potential returns per unit of risk. The ShaMaran Petroleum Corp is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 7.00 in ShaMaran Petroleum Corp on August 28, 2024 and sell it today you would earn a total of 2.00 from holding ShaMaran Petroleum Corp or generate 28.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Africa Energy Corp vs. ShaMaran Petroleum Corp
Performance |
| Timeline |
| Africa Energy Corp |
| ShaMaran Petroleum Corp |
Africa Energy and ShaMaran Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Africa Energy and ShaMaran Petroleum
The main advantage of trading using opposite Africa Energy and ShaMaran Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Africa Energy position performs unexpectedly, ShaMaran Petroleum 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 ShaMaran Petroleum will offset losses from the drop in ShaMaran Petroleum's long position.| Africa Energy vs. Petroleo Brasileiro Petrobras | Africa Energy vs. Equinor ASA ADR | Africa Energy vs. Eni SpA ADR | Africa Energy vs. YPF Sociedad Anonima |
| ShaMaran Petroleum vs. Petroleo Brasileiro Petrobras | ShaMaran Petroleum vs. Equinor ASA ADR | ShaMaran Petroleum vs. Eni SpA ADR | ShaMaran Petroleum vs. YPF Sociedad Anonima |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency |