Correlation Between San Juan and Invictus Energy
Can any of the company-specific risk be diversified away by investing in both San Juan and Invictus 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 San Juan and Invictus Energy 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 Invictus Energy Limited, you can compare the effects of market volatilities on San Juan and Invictus 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 San Juan with a short position of Invictus Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of San Juan and Invictus Energy.
Diversification Opportunities for San Juan and Invictus Energy
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between San and Invictus is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding San Juan Basin and Invictus Energy Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invictus Energy 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 Invictus Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invictus Energy has no effect on the direction of San Juan i.e., San Juan and Invictus Energy go up and down completely randomly.
Pair Corralation between San Juan and Invictus Energy
Considering the 90-day investment horizon San Juan is expected to generate 8.95 times less return on investment than Invictus Energy. But when comparing it to its historical volatility, San Juan Basin is 2.76 times less risky than Invictus Energy. It trades about 0.03 of its potential returns per unit of risk. Invictus Energy Limited is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 4.27 in Invictus Energy Limited on September 12, 2024 and sell it today you would earn a total of 0.37 from holding Invictus Energy Limited or generate 8.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
San Juan Basin vs. Invictus Energy Limited
Performance |
| Timeline |
| San Juan Basin |
| Invictus Energy |
San Juan and Invictus Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with San Juan and Invictus Energy
The main advantage of trading using opposite San Juan and Invictus Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if San Juan position performs unexpectedly, Invictus 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 Invictus Energy will offset losses from the drop in Invictus Energy's long position.| San Juan vs. POSCO Holdings | San Juan vs. Schweizerische Nationalbank | San Juan vs. Berkshire Hathaway | San Juan vs. Berkshire Hathaway |
| Invictus Energy vs. Permian Resources | Invictus Energy vs. Devon Energy | Invictus Energy vs. EOG Resources | Invictus Energy vs. Coterra 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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