Correlation Between Santa Fe and PrimeEnergy
Can any of the company-specific risk be diversified away by investing in both Santa Fe and PrimeEnergy 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 PrimeEnergy 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 PrimeEnergy, you can compare the effects of market volatilities on Santa Fe and PrimeEnergy 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 PrimeEnergy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Santa Fe and PrimeEnergy.
Diversification Opportunities for Santa Fe and PrimeEnergy
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Santa and PrimeEnergy is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Santa Fe Petroleum and PrimeEnergy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PrimeEnergy 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 PrimeEnergy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PrimeEnergy has no effect on the direction of Santa Fe i.e., Santa Fe and PrimeEnergy go up and down completely randomly.
Pair Corralation between Santa Fe and PrimeEnergy
If you would invest 17,539 in PrimeEnergy on September 14, 2024 and sell it today you would earn a total of 1,761 from holding PrimeEnergy or generate 10.04% 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. PrimeEnergy
Performance |
| Timeline |
| Santa Fe Petroleum |
| PrimeEnergy |
Santa Fe and PrimeEnergy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Santa Fe and PrimeEnergy
The main advantage of trading using opposite Santa Fe and PrimeEnergy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Santa Fe position performs unexpectedly, PrimeEnergy 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 PrimeEnergy will offset losses from the drop in PrimeEnergy's long position.| Santa Fe vs. Permian Resources | Santa Fe vs. Devon Energy | Santa Fe vs. EOG Resources | Santa Fe vs. Coterra Energy |
| PrimeEnergy vs. Epsilon Energy | PrimeEnergy vs. Crescent Energy Co | PrimeEnergy vs. Evolution Petroleum | PrimeEnergy vs. MorningStar Partners, LP |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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