Correlation Between ShaMaran Petroleum and Valeura Energy
Can any of the company-specific risk be diversified away by investing in both ShaMaran Petroleum and Valeura 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 ShaMaran Petroleum and Valeura Energy 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 Valeura Energy, you can compare the effects of market volatilities on ShaMaran Petroleum and Valeura 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 ShaMaran Petroleum with a short position of Valeura Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of ShaMaran Petroleum and Valeura Energy.
Diversification Opportunities for ShaMaran Petroleum and Valeura Energy
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ShaMaran and Valeura is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding ShaMaran Petroleum Corp and Valeura Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Valeura Energy 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 Valeura Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Valeura Energy has no effect on the direction of ShaMaran Petroleum i.e., ShaMaran Petroleum and Valeura Energy go up and down completely randomly.
Pair Corralation between ShaMaran Petroleum and Valeura Energy
Assuming the 90 days horizon ShaMaran Petroleum Corp is expected to generate 1.49 times more return on investment than Valeura Energy. However, ShaMaran Petroleum is 1.49 times more volatile than Valeura Energy. It trades about 0.39 of its potential returns per unit of risk. Valeura Energy is currently generating about -0.01 per unit of risk. If you would invest 9.00 in ShaMaran Petroleum Corp on December 1, 2024 and sell it today you would earn a total of 5.00 from holding ShaMaran Petroleum Corp or generate 55.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ShaMaran Petroleum Corp vs. Valeura Energy
Performance |
| Timeline |
| ShaMaran Petroleum Corp |
| Valeura Energy |
ShaMaran Petroleum and Valeura Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ShaMaran Petroleum and Valeura Energy
The main advantage of trading using opposite ShaMaran Petroleum and Valeura Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ShaMaran Petroleum position performs unexpectedly, Valeura 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 Valeura Energy will offset losses from the drop in Valeura Energy'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 |
| Valeura Energy vs. Paysafe | Valeura Energy vs. Willamette Valley Vineyards | Valeura Energy vs. Primo Brands | Valeura Energy vs. Q2 Holdings |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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