Correlation Between PetroShale and Southern Cross
Can any of the company-specific risk be diversified away by investing in both PetroShale and Southern Cross 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 Southern Cross into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PetroShale and Southern Cross Media, you can compare the effects of market volatilities on PetroShale and Southern Cross 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 Southern Cross. Check out your portfolio center. Please also check ongoing floating volatility patterns of PetroShale and Southern Cross.
Diversification Opportunities for PetroShale and Southern Cross
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between PetroShale and Southern is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding PetroShale and Southern Cross Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southern Cross Media 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 Southern Cross. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southern Cross Media has no effect on the direction of PetroShale i.e., PetroShale and Southern Cross go up and down completely randomly.
Pair Corralation between PetroShale and Southern Cross
Assuming the 90 days horizon PetroShale is expected to generate 3.81 times less return on investment than Southern Cross. But when comparing it to its historical volatility, PetroShale is 2.77 times less risky than Southern Cross. It trades about 0.13 of its potential returns per unit of risk. Southern Cross Media is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 9.73 in Southern Cross Media on November 3, 2024 and sell it today you would earn a total of 1.27 from holding Southern Cross Media or generate 13.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PetroShale vs. Southern Cross Media
Performance |
| Timeline |
| PetroShale |
| Southern Cross Media |
PetroShale and Southern Cross Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PetroShale and Southern Cross
The main advantage of trading using opposite PetroShale and Southern Cross positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PetroShale position performs unexpectedly, Southern Cross 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 Southern Cross will offset losses from the drop in Southern Cross' long position.| PetroShale vs. Dno ASA | PetroShale vs. Horizon Oil Limited | PetroShale vs. Enwell Energy plc | PetroShale vs. Tullow Oil plc |
| Southern Cross vs. Pieridae Energy Limited | Southern Cross vs. Prospera Energy | Southern Cross vs. Ngx Energy International | Southern Cross vs. Barrister Energy LLC |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments |