Correlation Between SDX Energy and Caspian Sunrise
Can any of the company-specific risk be diversified away by investing in both SDX Energy and Caspian Sunrise 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 SDX Energy and Caspian Sunrise into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SDX Energy plc and Caspian Sunrise Plc, you can compare the effects of market volatilities on SDX Energy and Caspian Sunrise 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 SDX Energy with a short position of Caspian Sunrise. Check out your portfolio center. Please also check ongoing floating volatility patterns of SDX Energy and Caspian Sunrise.
Diversification Opportunities for SDX Energy and Caspian Sunrise
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between SDX and Caspian is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding SDX Energy plc and Caspian Sunrise Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caspian Sunrise Plc and SDX 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 SDX Energy plc are associated (or correlated) with Caspian Sunrise. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Caspian Sunrise Plc has no effect on the direction of SDX Energy i.e., SDX Energy and Caspian Sunrise go up and down completely randomly.
Pair Corralation between SDX Energy and Caspian Sunrise
If you would invest 0.98 in SDX Energy plc on September 3, 2024 and sell it today you would lose (0.27) from holding SDX Energy plc or give up 27.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
SDX Energy plc vs. Caspian Sunrise Plc
Performance |
| Timeline |
| SDX Energy plc |
| Caspian Sunrise Plc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
SDX Energy and Caspian Sunrise Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SDX Energy and Caspian Sunrise
The main advantage of trading using opposite SDX Energy and Caspian Sunrise positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SDX Energy position performs unexpectedly, Caspian Sunrise 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 Caspian Sunrise will offset losses from the drop in Caspian Sunrise's long position.| SDX Energy vs. 1st NRG Corp | SDX Energy vs. Petro Viking Energy | SDX Energy vs. Otto Energy Limited | SDX Energy vs. Empire Petroleum Corp |
| Caspian Sunrise vs. Otto Energy Limited | Caspian Sunrise vs. Alvopetro Energy | Caspian Sunrise vs. Empire Petroleum Corp | Caspian Sunrise vs. 1st NRG Corp |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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