Correlation Between San Juan and Trek Resources
Can any of the company-specific risk be diversified away by investing in both San Juan and Trek Resources 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 Trek Resources 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 Trek Resources, you can compare the effects of market volatilities on San Juan and Trek Resources 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 Trek Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of San Juan and Trek Resources.
Diversification Opportunities for San Juan and Trek Resources
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between San and Trek is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding San Juan Basin and Trek Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trek Resources 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 Trek Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trek Resources has no effect on the direction of San Juan i.e., San Juan and Trek Resources go up and down completely randomly.
Pair Corralation between San Juan and Trek Resources
Considering the 90-day investment horizon San Juan Basin is expected to generate 1.38 times more return on investment than Trek Resources. However, San Juan is 1.38 times more volatile than Trek Resources. It trades about 0.05 of its potential returns per unit of risk. Trek Resources is currently generating about -0.09 per unit of risk. If you would invest 395.00 in San Juan Basin on September 3, 2024 and sell it today you would earn a total of 52.00 from holding San Juan Basin or generate 13.16% 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. Trek Resources
Performance |
| Timeline |
| San Juan Basin |
| Trek Resources |
San Juan and Trek Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with San Juan and Trek Resources
The main advantage of trading using opposite San Juan and Trek Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if San Juan position performs unexpectedly, Trek Resources 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 Trek Resources will offset losses from the drop in Trek Resources' 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 |
| Trek Resources vs. CNX Resources Corp | Trek Resources vs. MV Oil Trust | Trek Resources vs. San Juan Basin | Trek Resources 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |