Correlation Between Saturn Oil and CGX Energy
Can any of the company-specific risk be diversified away by investing in both Saturn Oil and CGX 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 CGX 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 CGX Energy, you can compare the effects of market volatilities on Saturn Oil and CGX 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 CGX Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saturn Oil and CGX Energy.
Diversification Opportunities for Saturn Oil and CGX Energy
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Saturn and CGX is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Saturn Oil Gas and CGX Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CGX 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 CGX Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CGX Energy has no effect on the direction of Saturn Oil i.e., Saturn Oil and CGX Energy go up and down completely randomly.
Pair Corralation between Saturn Oil and CGX Energy
Assuming the 90 days horizon Saturn Oil Gas is expected to under-perform the CGX Energy. But the otc stock apears to be less risky and, when comparing its historical volatility, Saturn Oil Gas is 3.09 times less risky than CGX Energy. The otc stock trades about -0.11 of its potential returns per unit of risk. The CGX Energy is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 10.00 in CGX Energy on November 3, 2024 and sell it today you would earn a total of 1.00 from holding CGX Energy or generate 10.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Saturn Oil Gas vs. CGX Energy
Performance |
| Timeline |
| Saturn Oil Gas |
| CGX Energy |
Saturn Oil and CGX Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Saturn Oil and CGX Energy
The main advantage of trading using opposite Saturn Oil and CGX Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saturn Oil position performs unexpectedly, CGX 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 CGX Energy will offset losses from the drop in CGX 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 |
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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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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