Correlation Between PetroShale and San Juan
Can any of the company-specific risk be diversified away by investing in both PetroShale and San Juan 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 San Juan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PetroShale and San Juan Basin, you can compare the effects of market volatilities on PetroShale and San Juan 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 San Juan. Check out your portfolio center. Please also check ongoing floating volatility patterns of PetroShale and San Juan.
Diversification Opportunities for PetroShale and San Juan
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between PetroShale and San is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding PetroShale and San Juan Basin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on San Juan Basin 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 San Juan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of San Juan Basin has no effect on the direction of PetroShale i.e., PetroShale and San Juan go up and down completely randomly.
Pair Corralation between PetroShale and San Juan
Assuming the 90 days horizon PetroShale is expected to under-perform the San Juan. But the otc stock apears to be less risky and, when comparing its historical volatility, PetroShale is 1.57 times less risky than San Juan. The otc stock trades about -0.27 of its potential returns per unit of risk. The San Juan Basin is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 380.00 in San Juan Basin on August 28, 2024 and sell it today you would earn a total of 26.00 from holding San Juan Basin or generate 6.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PetroShale vs. San Juan Basin
Performance |
| Timeline |
| PetroShale |
| San Juan Basin |
PetroShale and San Juan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PetroShale and San Juan
The main advantage of trading using opposite PetroShale and San Juan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PetroShale position performs unexpectedly, San Juan 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 San Juan will offset losses from the drop in San Juan's long position.| PetroShale vs. Dno ASA | PetroShale vs. Horizon Oil Limited | PetroShale vs. Enwell Energy plc | PetroShale vs. Tullow Oil plc |
| San Juan vs. Sabine Royalty Trust | San Juan vs. Permian Basin Royalty | San Juan vs. Cross Timbers Royalty | San Juan vs. Mesa Royalty Trust |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
Other Complementary Tools
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments |