Correlation Between San Juan and Karoon Energy
Can any of the company-specific risk be diversified away by investing in both San Juan and Karoon 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 Karoon 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 Karoon Energy, you can compare the effects of market volatilities on San Juan and Karoon 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 Karoon Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of San Juan and Karoon Energy.
Diversification Opportunities for San Juan and Karoon Energy
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between San and Karoon is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding San Juan Basin and Karoon Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Karoon 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 Karoon Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Karoon Energy has no effect on the direction of San Juan i.e., San Juan and Karoon Energy go up and down completely randomly.
Pair Corralation between San Juan and Karoon Energy
Considering the 90-day investment horizon San Juan Basin is expected to under-perform the Karoon Energy. But the stock apears to be less risky and, when comparing its historical volatility, San Juan Basin is 1.59 times less risky than Karoon Energy. The stock trades about -0.05 of its potential returns per unit of risk. The Karoon Energy is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 126.00 in Karoon Energy on September 12, 2024 and sell it today you would lose (26.00) from holding Karoon Energy or give up 20.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.46% |
| Values | Daily Returns |
San Juan Basin vs. Karoon Energy
Performance |
| Timeline |
| San Juan Basin |
| Karoon Energy |
San Juan and Karoon Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with San Juan and Karoon Energy
The main advantage of trading using opposite San Juan and Karoon Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if San Juan position performs unexpectedly, Karoon 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 Karoon Energy will offset losses from the drop in Karoon Energy's long position.| San Juan vs. POSCO Holdings | San Juan vs. Schweizerische Nationalbank | San Juan vs. Berkshire Hathaway | San Juan vs. Berkshire Hathaway |
| Karoon Energy vs. VOC Energy Trust | Karoon Energy vs. Dorchester Minerals LP | Karoon Energy vs. Black Stone Minerals | Karoon Energy vs. EOG Resources |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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