Correlation Between Sintana Energy and Coterra Energy
Can any of the company-specific risk be diversified away by investing in both Sintana Energy and Coterra 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 Coterra 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 Coterra Energy, you can compare the effects of market volatilities on Sintana Energy and Coterra 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 Coterra Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sintana Energy and Coterra Energy.
Diversification Opportunities for Sintana Energy and Coterra Energy
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sintana and Coterra is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Sintana Energy and Coterra Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coterra 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 Coterra Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coterra Energy has no effect on the direction of Sintana Energy i.e., Sintana Energy and Coterra Energy go up and down completely randomly.
Pair Corralation between Sintana Energy and Coterra Energy
Assuming the 90 days horizon Sintana Energy is expected to generate 3.66 times more return on investment than Coterra Energy. However, Sintana Energy is 3.66 times more volatile than Coterra Energy. It trades about 0.1 of its potential returns per unit of risk. Coterra Energy is currently generating about 0.03 per unit of risk. If you would invest 8.10 in Sintana Energy on August 30, 2024 and sell it today you would earn a total of 61.90 from holding Sintana Energy or generate 764.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Sintana Energy vs. Coterra Energy
Performance |
| Timeline |
| Sintana Energy |
| Coterra Energy |
Sintana Energy and Coterra Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sintana Energy and Coterra Energy
The main advantage of trading using opposite Sintana Energy and Coterra Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sintana Energy position performs unexpectedly, Coterra 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 Coterra Energy will offset losses from the drop in Coterra Energy'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 |
| Coterra Energy vs. Devon Energy | Coterra Energy vs. Diamondback Energy | Coterra Energy vs. EOG Resources | Coterra Energy vs. ConocoPhillips |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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