Correlation Between I3 Energy and Southern Cross
Can any of the company-specific risk be diversified away by investing in both I3 Energy and Southern Cross 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 I3 Energy and Southern Cross into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between i3 Energy Plc and Southern Cross Media, you can compare the effects of market volatilities on I3 Energy and Southern Cross 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 I3 Energy with a short position of Southern Cross. Check out your portfolio center. Please also check ongoing floating volatility patterns of I3 Energy and Southern Cross.
Diversification Opportunities for I3 Energy and Southern Cross
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ITEEF and Southern is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding i3 Energy Plc and Southern Cross Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southern Cross Media and I3 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 i3 Energy Plc are associated (or correlated) with Southern Cross. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southern Cross Media has no effect on the direction of I3 Energy i.e., I3 Energy and Southern Cross go up and down completely randomly.
Pair Corralation between I3 Energy and Southern Cross
Assuming the 90 days horizon i3 Energy Plc is expected to generate 1.57 times more return on investment than Southern Cross. However, I3 Energy is 1.57 times more volatile than Southern Cross Media. It trades about 0.04 of its potential returns per unit of risk. Southern Cross Media is currently generating about -0.07 per unit of risk. If you would invest 12.00 in i3 Energy Plc on August 26, 2024 and sell it today you would earn a total of 2.00 from holding i3 Energy Plc or generate 16.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 94.38% |
| Values | Daily Returns |
i3 Energy Plc vs. Southern Cross Media
Performance |
| Timeline |
| i3 Energy Plc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Southern Cross Media |
I3 Energy and Southern Cross Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with I3 Energy and Southern Cross
The main advantage of trading using opposite I3 Energy and Southern Cross positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if I3 Energy position performs unexpectedly, Southern Cross 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 Southern Cross will offset losses from the drop in Southern Cross' long position.| I3 Energy vs. Permian Resources | I3 Energy vs. Devon Energy | I3 Energy vs. EOG Resources | I3 Energy vs. Coterra Energy |
| Southern Cross vs. Permian Resources | Southern Cross vs. Devon Energy | Southern Cross vs. EOG Resources | Southern Cross 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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