Correlation Between SandRidge Energy and Aemetis
Can any of the company-specific risk be diversified away by investing in both SandRidge Energy and Aemetis 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 SandRidge Energy and Aemetis into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SandRidge Energy and Aemetis, you can compare the effects of market volatilities on SandRidge Energy and Aemetis 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 SandRidge Energy with a short position of Aemetis. Check out your portfolio center. Please also check ongoing floating volatility patterns of SandRidge Energy and Aemetis.
Diversification Opportunities for SandRidge Energy and Aemetis
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SandRidge and Aemetis is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding SandRidge Energy and Aemetis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aemetis and SandRidge Energy 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 SandRidge Energy are associated (or correlated) with Aemetis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aemetis has no effect on the direction of SandRidge Energy i.e., SandRidge Energy and Aemetis go up and down completely randomly.
Pair Corralation between SandRidge Energy and Aemetis
Allowing for the 90-day total investment horizon SandRidge Energy is expected to generate 4.37 times less return on investment than Aemetis. But when comparing it to its historical volatility, SandRidge Energy is 4.61 times less risky than Aemetis. It trades about 0.24 of its potential returns per unit of risk. Aemetis is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 288.00 in Aemetis on August 27, 2024 and sell it today you would earn a total of 115.00 from holding Aemetis or generate 39.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SandRidge Energy vs. Aemetis
Performance |
| Timeline |
| SandRidge Energy |
| Aemetis |
SandRidge Energy and Aemetis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SandRidge Energy and Aemetis
The main advantage of trading using opposite SandRidge Energy and Aemetis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SandRidge Energy position performs unexpectedly, Aemetis 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 Aemetis will offset losses from the drop in Aemetis' long position.| SandRidge Energy vs. Range Resources Corp | SandRidge Energy vs. SM Energy Co | SandRidge Energy vs. Northern Oil Gas |
| Aemetis vs. PBF Energy | Aemetis vs. Clean Energy Fuels | Aemetis vs. Par Pacific Holdings | Aemetis vs. Vertex 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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