Correlation Between SandRidge Energy and Sachem Capital
Can any of the company-specific risk be diversified away by investing in both SandRidge Energy and Sachem Capital 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 Sachem Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SandRidge Energy and Sachem Capital Corp, you can compare the effects of market volatilities on SandRidge Energy and Sachem Capital 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 Sachem Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of SandRidge Energy and Sachem Capital.
Diversification Opportunities for SandRidge Energy and Sachem Capital
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SandRidge and Sachem is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding SandRidge Energy and Sachem Capital Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sachem Capital Corp 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 Sachem Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sachem Capital Corp has no effect on the direction of SandRidge Energy i.e., SandRidge Energy and Sachem Capital go up and down completely randomly.
Pair Corralation between SandRidge Energy and Sachem Capital
Allowing for the 90-day total investment horizon SandRidge Energy is expected to generate 17.27 times more return on investment than Sachem Capital. However, SandRidge Energy is 17.27 times more volatile than Sachem Capital Corp. It trades about 0.17 of its potential returns per unit of risk. Sachem Capital Corp is currently generating about 0.05 per unit of risk. If you would invest 1,099 in SandRidge Energy on September 1, 2024 and sell it today you would earn a total of 74.00 from holding SandRidge Energy or generate 6.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SandRidge Energy vs. Sachem Capital Corp
Performance |
| Timeline |
| SandRidge Energy |
| Sachem Capital Corp |
SandRidge Energy and Sachem Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SandRidge Energy and Sachem Capital
The main advantage of trading using opposite SandRidge Energy and Sachem Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SandRidge Energy position performs unexpectedly, Sachem Capital 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 Sachem Capital will offset losses from the drop in Sachem Capital's long position.| SandRidge Energy vs. Range Resources Corp | SandRidge Energy vs. SM Energy Co | SandRidge Energy vs. Northern Oil Gas |
| Sachem Capital vs. Sachem Capital Corp | Sachem Capital vs. Eagle Point Credit | Sachem Capital vs. B Riley Financial |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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