Correlation Between Saturn Oil and MEG Energy
Can any of the company-specific risk be diversified away by investing in both Saturn Oil and MEG 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 MEG 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 MEG Energy Corp, you can compare the effects of market volatilities on Saturn Oil and MEG 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 MEG Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saturn Oil and MEG Energy.
Diversification Opportunities for Saturn Oil and MEG Energy
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Saturn and MEG is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Saturn Oil Gas and MEG Energy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MEG Energy Corp 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 MEG Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MEG Energy Corp has no effect on the direction of Saturn Oil i.e., Saturn Oil and MEG Energy go up and down completely randomly.
Pair Corralation between Saturn Oil and MEG Energy
Assuming the 90 days horizon Saturn Oil Gas is expected to generate 1.27 times more return on investment than MEG Energy. However, Saturn Oil is 1.27 times more volatile than MEG Energy Corp. It trades about -0.01 of its potential returns per unit of risk. MEG Energy Corp is currently generating about -0.03 per unit of risk. If you would invest 176.00 in Saturn Oil Gas on September 1, 2024 and sell it today you would lose (19.00) from holding Saturn Oil Gas or give up 10.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Saturn Oil Gas vs. MEG Energy Corp
Performance |
| Timeline |
| Saturn Oil Gas |
| MEG Energy Corp |
Saturn Oil and MEG Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Saturn Oil and MEG Energy
The main advantage of trading using opposite Saturn Oil and MEG Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saturn Oil position performs unexpectedly, MEG 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 MEG Energy will offset losses from the drop in MEG 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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