Correlation Between San Juan and Trio Petroleum
Can any of the company-specific risk be diversified away by investing in both San Juan and Trio 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 Trio 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 Trio Petroleum Corp, you can compare the effects of market volatilities on San Juan and Trio 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 Trio Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of San Juan and Trio Petroleum.
Diversification Opportunities for San Juan and Trio Petroleum
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between San and Trio is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding San Juan Basin and Trio Petroleum Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trio 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 Trio Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trio Petroleum Corp has no effect on the direction of San Juan i.e., San Juan and Trio Petroleum go up and down completely randomly.
Pair Corralation between San Juan and Trio Petroleum
Considering the 90-day investment horizon San Juan Basin is expected to generate 0.32 times more return on investment than Trio Petroleum. However, San Juan Basin is 3.15 times less risky than Trio Petroleum. It trades about 0.05 of its potential returns per unit of risk. Trio Petroleum Corp is currently generating about -0.1 per unit of risk. If you would invest 401.00 in San Juan Basin on September 1, 2024 and sell it today you would earn a total of 46.00 from holding San Juan Basin or generate 11.47% 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. Trio Petroleum Corp
Performance |
| Timeline |
| San Juan Basin |
| Trio Petroleum Corp |
San Juan and Trio Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with San Juan and Trio Petroleum
The main advantage of trading using opposite San Juan and Trio Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if San Juan position performs unexpectedly, Trio 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 Trio Petroleum will offset losses from the drop in Trio 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 |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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