Correlation Between Santa Fe and Liberty Energy
Can any of the company-specific risk be diversified away by investing in both Santa Fe and Liberty 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 Santa Fe and Liberty Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Santa Fe Petroleum and Liberty Energy Corp, you can compare the effects of market volatilities on Santa Fe and Liberty 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 Santa Fe with a short position of Liberty Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Santa Fe and Liberty Energy.
Diversification Opportunities for Santa Fe and Liberty Energy
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Santa and Liberty is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Santa Fe Petroleum and Liberty Energy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liberty Energy Corp and Santa Fe 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 Santa Fe Petroleum are associated (or correlated) with Liberty Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liberty Energy Corp has no effect on the direction of Santa Fe i.e., Santa Fe and Liberty Energy go up and down completely randomly.
Pair Corralation between Santa Fe and Liberty Energy
If you would invest 0.01 in Liberty Energy Corp on September 14, 2024 and sell it today you would earn a total of 0.00 from holding Liberty Energy Corp or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Santa Fe Petroleum vs. Liberty Energy Corp
Performance |
| Timeline |
| Santa Fe Petroleum |
| Liberty Energy Corp |
Santa Fe and Liberty Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Santa Fe and Liberty Energy
The main advantage of trading using opposite Santa Fe and Liberty Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Santa Fe position performs unexpectedly, Liberty 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 Liberty Energy will offset losses from the drop in Liberty Energy's long position.| Santa Fe vs. Permian Resources | Santa Fe vs. Devon Energy | Santa Fe vs. EOG Resources | Santa Fe vs. Coterra Energy |
| Liberty Energy vs. Tiger Oil And | Liberty Energy vs. Black Dragon Resource | Liberty Energy vs. MMEX Resources Corp | Liberty Energy vs. Magellan Energy |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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