Correlation Between Saturn Oil and Birchcliff Energy
Can any of the company-specific risk be diversified away by investing in both Saturn Oil and Birchcliff Energy 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 Saturn Oil and Birchcliff Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Saturn Oil Gas and Birchcliff Energy, you can compare the effects of market volatilities on Saturn Oil and Birchcliff Energy 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 Saturn Oil with a short position of Birchcliff Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saturn Oil and Birchcliff Energy.
Diversification Opportunities for Saturn Oil and Birchcliff Energy
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Saturn and Birchcliff is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Saturn Oil Gas and Birchcliff Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Birchcliff Energy and Saturn 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 Saturn Oil Gas are associated (or correlated) with Birchcliff Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Birchcliff Energy has no effect on the direction of Saturn Oil i.e., Saturn Oil and Birchcliff Energy go up and down completely randomly.
Pair Corralation between Saturn Oil and Birchcliff Energy
Assuming the 90 days horizon Saturn Oil Gas is expected to under-perform the Birchcliff Energy. In addition to that, Saturn Oil is 1.14 times more volatile than Birchcliff Energy. It trades about -0.01 of its total potential returns per unit of risk. Birchcliff Energy is currently generating about 0.0 per unit of volatility. If you would invest 400.00 in Birchcliff Energy on September 1, 2024 and sell it today you would lose (22.00) from holding Birchcliff Energy or give up 5.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.47% |
| Values | Daily Returns |
Saturn Oil Gas vs. Birchcliff Energy
Performance |
| Timeline |
| Saturn Oil Gas |
| Birchcliff Energy |
Saturn Oil and Birchcliff Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Saturn Oil and Birchcliff Energy
The main advantage of trading using opposite Saturn Oil and Birchcliff Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saturn Oil position performs unexpectedly, Birchcliff Energy 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 Birchcliff Energy will offset losses from the drop in Birchcliff Energy's long position.| Saturn Oil vs. San Leon Energy | Saturn Oil vs. Enwell Energy plc | Saturn Oil vs. Dno ASA | Saturn Oil vs. Questerre Energy |
| Birchcliff Energy vs. Tamarack Valley Energy | Birchcliff Energy vs. Peyto ExplorationDevelopment Corp | Birchcliff Energy vs. Gear Energy | Birchcliff Energy vs. Spartan Delta Corp |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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