Correlation Between San Juan and CKX Lands
Can any of the company-specific risk be diversified away by investing in both San Juan and CKX Lands 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 San Juan and CKX Lands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between San Juan Basin and CKX Lands, you can compare the effects of market volatilities on San Juan and CKX Lands 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 San Juan with a short position of CKX Lands. Check out your portfolio center. Please also check ongoing floating volatility patterns of San Juan and CKX Lands.
Diversification Opportunities for San Juan and CKX Lands
Very good diversification
The 3 months correlation between San and CKX is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding San Juan Basin and CKX Lands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CKX Lands and San Juan 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 San Juan Basin are associated (or correlated) with CKX Lands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CKX Lands has no effect on the direction of San Juan i.e., San Juan and CKX Lands go up and down completely randomly.
Pair Corralation between San Juan and CKX Lands
Considering the 90-day investment horizon San Juan Basin is expected to generate 2.38 times more return on investment than CKX Lands. However, San Juan is 2.38 times more volatile than CKX Lands. It trades about 0.22 of its potential returns per unit of risk. CKX Lands is currently generating about -0.31 per unit of risk. If you would invest 388.00 in San Juan Basin on October 21, 2024 and sell it today you would earn a total of 56.00 from holding San Juan Basin or generate 14.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
San Juan Basin vs. CKX Lands
Performance |
| Timeline |
| San Juan Basin |
| CKX Lands |
San Juan and CKX Lands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with San Juan and CKX Lands
The main advantage of trading using opposite San Juan and CKX Lands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if San Juan position performs unexpectedly, CKX Lands 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 CKX Lands will offset losses from the drop in CKX Lands' long position.| San Juan vs. Sabine Royalty Trust | San Juan vs. Permian Basin Royalty | San Juan vs. Cross Timbers Royalty | San Juan vs. Mesa Royalty Trust |
| CKX Lands vs. PrimeEnergy | CKX Lands vs. MorningStar Partners, LP | CKX Lands vs. XXL Energy Corp | CKX Lands vs. Magnolia Oil Gas |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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