Correlation Between ShaMaran Petroleum and Energy Revenue
Can any of the company-specific risk be diversified away by investing in both ShaMaran Petroleum and Energy Revenue 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 ShaMaran Petroleum and Energy Revenue into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ShaMaran Petroleum Corp and Energy Revenue Amer, you can compare the effects of market volatilities on ShaMaran Petroleum and Energy Revenue 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 ShaMaran Petroleum with a short position of Energy Revenue. Check out your portfolio center. Please also check ongoing floating volatility patterns of ShaMaran Petroleum and Energy Revenue.
Diversification Opportunities for ShaMaran Petroleum and Energy Revenue
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between ShaMaran and Energy is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding ShaMaran Petroleum Corp and Energy Revenue Amer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Energy Revenue Amer and ShaMaran Petroleum 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 ShaMaran Petroleum Corp are associated (or correlated) with Energy Revenue. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Energy Revenue Amer has no effect on the direction of ShaMaran Petroleum i.e., ShaMaran Petroleum and Energy Revenue go up and down completely randomly.
Pair Corralation between ShaMaran Petroleum and Energy Revenue
Assuming the 90 days horizon ShaMaran Petroleum is expected to generate 5.89 times less return on investment than Energy Revenue. But when comparing it to its historical volatility, ShaMaran Petroleum Corp is 8.54 times less risky than Energy Revenue. It trades about 0.39 of its potential returns per unit of risk. Energy Revenue Amer is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 1.21 in Energy Revenue Amer on December 1, 2024 and sell it today you would earn a total of 2.30 from holding Energy Revenue Amer or generate 190.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ShaMaran Petroleum Corp vs. Energy Revenue Amer
Performance |
| Timeline |
| ShaMaran Petroleum Corp |
| Energy Revenue Amer |
ShaMaran Petroleum and Energy Revenue Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ShaMaran Petroleum and Energy Revenue
The main advantage of trading using opposite ShaMaran Petroleum and Energy Revenue positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ShaMaran Petroleum position performs unexpectedly, Energy Revenue 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 Energy Revenue will offset losses from the drop in Energy Revenue's long position.| ShaMaran Petroleum vs. PetroShale | ShaMaran Petroleum vs. Africa Energy Corp | ShaMaran Petroleum vs. Horizon Oil Limited | ShaMaran Petroleum vs. Saturn Oil Gas |
| Energy Revenue vs. Gulfport Energy Operating | Energy Revenue vs. Magnolia Oil Gas | Energy Revenue vs. Vital Energy | Energy Revenue vs. Texas Pacific Land |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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