Correlation Between Sintana Energy and Avanti Energy
Can any of the company-specific risk be diversified away by investing in both Sintana Energy and Avanti Energy 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 Sintana Energy and Avanti Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sintana Energy and Avanti Energy, you can compare the effects of market volatilities on Sintana Energy and Avanti Energy 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 Sintana Energy with a short position of Avanti Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sintana Energy and Avanti Energy.
Diversification Opportunities for Sintana Energy and Avanti Energy
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sintana and Avanti is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Sintana Energy and Avanti Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avanti Energy and Sintana 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 Sintana Energy are associated (or correlated) with Avanti Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avanti Energy has no effect on the direction of Sintana Energy i.e., Sintana Energy and Avanti Energy go up and down completely randomly.
Pair Corralation between Sintana Energy and Avanti Energy
Assuming the 90 days horizon Sintana Energy is expected to generate 0.69 times more return on investment than Avanti Energy. However, Sintana Energy is 1.45 times less risky than Avanti Energy. It trades about -0.06 of its potential returns per unit of risk. Avanti Energy is currently generating about -0.09 per unit of risk. If you would invest 75.00 in Sintana Energy on August 30, 2024 and sell it today you would lose (5.00) from holding Sintana Energy or give up 6.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Sintana Energy vs. Avanti Energy
Performance |
| Timeline |
| Sintana Energy |
| Avanti Energy |
Sintana Energy and Avanti Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sintana Energy and Avanti Energy
The main advantage of trading using opposite Sintana Energy and Avanti Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sintana Energy position performs unexpectedly, Avanti Energy 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 Avanti Energy will offset losses from the drop in Avanti Energy's long position.| Sintana Energy vs. Permian Resources | Sintana Energy vs. Devon Energy | Sintana Energy vs. EOG Resources | Sintana Energy vs. Coterra Energy |
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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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