Correlation Between Horizon Oil and Saturn Oil
Can any of the company-specific risk be diversified away by investing in both Horizon Oil 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 Horizon Oil and Saturn Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Horizon Oil Limited and Saturn Oil Gas, you can compare the effects of market volatilities on Horizon Oil 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 Horizon Oil with a short position of Saturn Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Horizon Oil and Saturn Oil.
Diversification Opportunities for Horizon Oil and Saturn Oil
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Horizon and Saturn is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Horizon Oil Limited 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 Horizon Oil 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 Horizon Oil Limited 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 Horizon Oil i.e., Horizon Oil and Saturn Oil go up and down completely randomly.
Pair Corralation between Horizon Oil and Saturn Oil
Assuming the 90 days horizon Horizon Oil Limited is expected to generate 4.11 times more return on investment than Saturn Oil. However, Horizon Oil is 4.11 times more volatile than Saturn Oil Gas. It trades about 0.07 of its potential returns per unit of risk. Saturn Oil Gas is currently generating about 0.0 per unit of risk. If you would invest 7.76 in Horizon Oil Limited on August 31, 2024 and sell it today you would earn a total of 5.24 from holding Horizon Oil Limited or generate 67.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 66.76% |
| Values | Daily Returns |
Horizon Oil Limited vs. Saturn Oil Gas
Performance |
| Timeline |
| Horizon Oil Limited |
| Saturn Oil Gas |
Horizon Oil and Saturn Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Horizon Oil and Saturn Oil
The main advantage of trading using opposite Horizon Oil and Saturn Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Horizon Oil 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.| Horizon Oil vs. Dno ASA | Horizon Oil vs. PetroShale | Horizon Oil vs. Enwell Energy plc | Horizon Oil vs. Tullow Oil plc |
| 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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