Correlation Between San Juan and Saturn Oil
Can any of the company-specific risk be diversified away by investing in both San Juan and Saturn Oil 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 Saturn Oil 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 Saturn Oil Gas, you can compare the effects of market volatilities on San Juan and Saturn Oil 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 Saturn Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of San Juan and Saturn Oil.
Diversification Opportunities for San Juan and Saturn Oil
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between San and Saturn is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding San Juan Basin and Saturn Oil Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saturn Oil Gas 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 Saturn Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saturn Oil Gas has no effect on the direction of San Juan i.e., San Juan and Saturn Oil go up and down completely randomly.
Pair Corralation between San Juan and Saturn Oil
Considering the 90-day investment horizon San Juan Basin is expected to generate 0.99 times more return on investment than Saturn Oil. However, San Juan Basin is 1.01 times less risky than Saturn Oil. It trades about 0.02 of its potential returns per unit of risk. Saturn Oil Gas is currently generating about -0.03 per unit of risk. If you would invest 429.00 in San Juan Basin on September 3, 2024 and sell it today you would earn a total of 18.00 from holding San Juan Basin or generate 4.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
San Juan Basin vs. Saturn Oil Gas
Performance |
| Timeline |
| San Juan Basin |
| Saturn Oil Gas |
San Juan and Saturn Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with San Juan and Saturn Oil
The main advantage of trading using opposite San Juan and Saturn Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if San Juan position performs unexpectedly, Saturn Oil 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 Saturn Oil will offset losses from the drop in Saturn Oil's 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 |
| Saturn Oil vs. CNX Resources Corp | Saturn Oil vs. MV Oil Trust | Saturn Oil vs. San Juan Basin | Saturn Oil vs. VOC Energy Trust |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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