Correlation Between PetroShale and Saturn Oil
Can any of the company-specific risk be diversified away by investing in both PetroShale 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 PetroShale and Saturn Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PetroShale and Saturn Oil Gas, you can compare the effects of market volatilities on PetroShale 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 PetroShale with a short position of Saturn Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of PetroShale and Saturn Oil.
Diversification Opportunities for PetroShale and Saturn Oil
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between PetroShale and Saturn is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding PetroShale 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 PetroShale 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 PetroShale 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 PetroShale i.e., PetroShale and Saturn Oil go up and down completely randomly.
Pair Corralation between PetroShale and Saturn Oil
Assuming the 90 days horizon PetroShale is expected to under-perform the Saturn Oil. In addition to that, PetroShale is 1.22 times more volatile than Saturn Oil Gas. It trades about 0.0 of its total potential returns per unit of risk. Saturn Oil Gas is currently generating about 0.0 per unit of volatility. If you would invest 170.00 in Saturn Oil Gas on August 31, 2024 and sell it today you would lose (13.00) from holding Saturn Oil Gas or give up 7.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
PetroShale vs. Saturn Oil Gas
Performance |
| Timeline |
| PetroShale |
| Saturn Oil Gas |
PetroShale and Saturn Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PetroShale and Saturn Oil
The main advantage of trading using opposite PetroShale and Saturn Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PetroShale 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.| PetroShale vs. Petroleo Brasileiro Petrobras | PetroShale vs. Equinor ASA ADR | PetroShale vs. Eni SpA ADR | PetroShale vs. YPF Sociedad Anonima |
| 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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