Correlation Between San Juan and ShaMaran Petroleum
Can any of the company-specific risk be diversified away by investing in both San Juan and ShaMaran Petroleum 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 ShaMaran Petroleum 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 ShaMaran Petroleum Corp, you can compare the effects of market volatilities on San Juan and ShaMaran Petroleum 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 ShaMaran Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of San Juan and ShaMaran Petroleum.
Diversification Opportunities for San Juan and ShaMaran Petroleum
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between San and ShaMaran is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding San Juan Basin and ShaMaran Petroleum Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ShaMaran Petroleum Corp 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 ShaMaran Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ShaMaran Petroleum Corp has no effect on the direction of San Juan i.e., San Juan and ShaMaran Petroleum go up and down completely randomly.
Pair Corralation between San Juan and ShaMaran Petroleum
Considering the 90-day investment horizon San Juan Basin is expected to under-perform the ShaMaran Petroleum. But the stock apears to be less risky and, when comparing its historical volatility, San Juan Basin is 3.92 times less risky than ShaMaran Petroleum. The stock trades about -0.05 of its potential returns per unit of risk. The ShaMaran Petroleum Corp is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 7.00 in ShaMaran Petroleum Corp on August 28, 2024 and sell it today you would earn a total of 2.00 from holding ShaMaran Petroleum Corp or generate 28.57% 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. ShaMaran Petroleum Corp
Performance |
| Timeline |
| San Juan Basin |
| ShaMaran Petroleum Corp |
San Juan and ShaMaran Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with San Juan and ShaMaran Petroleum
The main advantage of trading using opposite San Juan and ShaMaran Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if San Juan position performs unexpectedly, ShaMaran Petroleum 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 ShaMaran Petroleum will offset losses from the drop in ShaMaran Petroleum'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 |
| ShaMaran Petroleum vs. Petroleo Brasileiro Petrobras | ShaMaran Petroleum vs. Equinor ASA ADR | ShaMaran Petroleum vs. Eni SpA ADR | ShaMaran Petroleum vs. YPF Sociedad Anonima |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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