Correlation Between Sintana Energy and Arrow Exploration
Can any of the company-specific risk be diversified away by investing in both Sintana Energy and Arrow Exploration 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 Arrow Exploration into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sintana Energy and Arrow Exploration Corp, you can compare the effects of market volatilities on Sintana Energy and Arrow Exploration 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 Arrow Exploration. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sintana Energy and Arrow Exploration.
Diversification Opportunities for Sintana Energy and Arrow Exploration
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sintana and Arrow is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Sintana Energy and Arrow Exploration Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arrow Exploration Corp 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 Arrow Exploration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arrow Exploration Corp has no effect on the direction of Sintana Energy i.e., Sintana Energy and Arrow Exploration go up and down completely randomly.
Pair Corralation between Sintana Energy and Arrow Exploration
Assuming the 90 days horizon Sintana Energy is expected to under-perform the Arrow Exploration. In addition to that, Sintana Energy is 1.1 times more volatile than Arrow Exploration Corp. It trades about -0.47 of its total potential returns per unit of risk. Arrow Exploration Corp is currently generating about -0.03 per unit of volatility. If you would invest 32.00 in Arrow Exploration Corp on November 3, 2024 and sell it today you would lose (1.00) from holding Arrow Exploration Corp or give up 3.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sintana Energy vs. Arrow Exploration Corp
Performance |
| Timeline |
| Sintana Energy |
| Arrow Exploration Corp |
Sintana Energy and Arrow Exploration Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sintana Energy and Arrow Exploration
The main advantage of trading using opposite Sintana Energy and Arrow Exploration positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sintana Energy position performs unexpectedly, Arrow Exploration 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 Arrow Exploration will offset losses from the drop in Arrow Exploration's long position.| Sintana Energy vs. Kiwetinohk Energy Corp | Sintana Energy vs. Melbana Energy Limited | Sintana Energy vs. Pancontinental Oil Gas | Sintana Energy vs. Eco Oil Gas |
| Arrow Exploration vs. Barrister Energy LLC | Arrow Exploration vs. Buru Energy Limited | Arrow Exploration vs. Altura Energy | Arrow Exploration vs. Daybreak Oil and |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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