Correlation Between San Leon and Chesapeake Granite
Can any of the company-specific risk be diversified away by investing in both San Leon and Chesapeake Granite 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 Leon and Chesapeake Granite into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between San Leon Energy and Chesapeake Granite Wash, you can compare the effects of market volatilities on San Leon and Chesapeake Granite 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 Leon with a short position of Chesapeake Granite. Check out your portfolio center. Please also check ongoing floating volatility patterns of San Leon and Chesapeake Granite.
Diversification Opportunities for San Leon and Chesapeake Granite
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between San and Chesapeake is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding San Leon Energy and Chesapeake Granite Wash in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chesapeake Granite Wash and San Leon 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 Leon Energy are associated (or correlated) with Chesapeake Granite. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chesapeake Granite Wash has no effect on the direction of San Leon i.e., San Leon and Chesapeake Granite go up and down completely randomly.
Pair Corralation between San Leon and Chesapeake Granite
Assuming the 90 days horizon San Leon Energy is expected to under-perform the Chesapeake Granite. In addition to that, San Leon is 1.34 times more volatile than Chesapeake Granite Wash. It trades about -0.02 of its total potential returns per unit of risk. Chesapeake Granite Wash is currently generating about 0.05 per unit of volatility. If you would invest 106.00 in Chesapeake Granite Wash on August 24, 2024 and sell it today you would earn a total of 12.00 from holding Chesapeake Granite Wash or generate 11.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 32.06% |
| Values | Daily Returns |
San Leon Energy vs. Chesapeake Granite Wash
Performance |
| Timeline |
| San Leon Energy |
| Chesapeake Granite Wash |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
San Leon and Chesapeake Granite Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with San Leon and Chesapeake Granite
The main advantage of trading using opposite San Leon and Chesapeake Granite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if San Leon position performs unexpectedly, Chesapeake Granite 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 Chesapeake Granite will offset losses from the drop in Chesapeake Granite's long position.| San Leon vs. Permian Resources | San Leon vs. Devon Energy | San Leon vs. EOG Resources | San Leon vs. Coterra Energy |
| Chesapeake Granite vs. VOC Energy Trust | Chesapeake Granite vs. MV Oil Trust | Chesapeake Granite vs. Mesa Royalty Trust | Chesapeake Granite vs. Cross Timbers Royalty |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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