Correlation Between Sintana Energy and Melbana Energy
Can any of the company-specific risk be diversified away by investing in both Sintana Energy and Melbana 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 Melbana 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 Melbana Energy Limited, you can compare the effects of market volatilities on Sintana Energy and Melbana 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 Melbana Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sintana Energy and Melbana Energy.
Diversification Opportunities for Sintana Energy and Melbana Energy
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sintana and Melbana is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Sintana Energy and Melbana Energy Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Melbana 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 Melbana Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Melbana Energy has no effect on the direction of Sintana Energy i.e., Sintana Energy and Melbana Energy go up and down completely randomly.
Pair Corralation between Sintana Energy and Melbana Energy
Assuming the 90 days horizon Sintana Energy is expected to under-perform the Melbana Energy. But the otc stock apears to be less risky and, when comparing its historical volatility, Sintana Energy is 8.61 times less risky than Melbana Energy. The otc stock trades about -0.47 of its potential returns per unit of risk. The Melbana Energy Limited is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 0.20 in Melbana Energy Limited on November 3, 2024 and sell it today you would earn a total of 0.30 from holding Melbana Energy Limited or generate 150.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sintana Energy vs. Melbana Energy Limited
Performance |
| Timeline |
| Sintana Energy |
| Melbana Energy |
Sintana Energy and Melbana Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sintana Energy and Melbana Energy
The main advantage of trading using opposite Sintana Energy and Melbana Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sintana Energy position performs unexpectedly, Melbana 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 Melbana Energy will offset losses from the drop in Melbana 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 |
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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |