Correlation Between Africa Energy and San Leon
Can any of the company-specific risk be diversified away by investing in both Africa Energy and San Leon 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 San Leon 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 San Leon Energy, you can compare the effects of market volatilities on Africa Energy and San Leon 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 San Leon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Africa Energy and San Leon.
Diversification Opportunities for Africa Energy and San Leon
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Africa and San is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Africa Energy Corp and San Leon Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on San Leon Energy 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 San Leon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of San Leon Energy has no effect on the direction of Africa Energy i.e., Africa Energy and San Leon go up and down completely randomly.
Pair Corralation between Africa Energy and San Leon
Assuming the 90 days horizon Africa Energy Corp is expected to generate 7.12 times more return on investment than San Leon. However, Africa Energy is 7.12 times more volatile than San Leon Energy. It trades about 0.0 of its potential returns per unit of risk. San Leon Energy is currently generating about -0.04 per unit of risk. If you would invest 12.00 in Africa Energy Corp on January 14, 2025 and sell it today you would lose (9.50) from holding Africa Energy Corp or give up 79.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.0% |
| Values | Daily Returns |
Africa Energy Corp vs. San Leon Energy
Performance |
| Timeline |
| Africa Energy Corp |
| San Leon Energy |
Africa Energy and San Leon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Africa Energy and San Leon
The main advantage of trading using opposite Africa Energy and San Leon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Africa Energy position performs unexpectedly, San Leon 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 San Leon will offset losses from the drop in San Leon's long position.| Africa Energy vs. Horizon Oil Limited | Africa Energy vs. Saturn Oil Gas | Africa Energy vs. San Leon Energy | Africa Energy vs. Enwell Energy plc |
| San Leon vs. Horizon Oil Limited | San Leon vs. Enwell Energy plc | San Leon vs. Tullow Oil plc | San Leon vs. Dno ASA |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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