Correlation Between San Leon and Inpex Corp
Can any of the company-specific risk be diversified away by investing in both San Leon and Inpex Corp 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 Inpex Corp 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 Inpex Corp ADR, you can compare the effects of market volatilities on San Leon and Inpex Corp 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 Inpex Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of San Leon and Inpex Corp.
Diversification Opportunities for San Leon and Inpex Corp
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between San and Inpex is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding San Leon Energy and Inpex Corp ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inpex Corp ADR 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 Inpex Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inpex Corp ADR has no effect on the direction of San Leon i.e., San Leon and Inpex Corp go up and down completely randomly.
Pair Corralation between San Leon and Inpex Corp
Assuming the 90 days horizon San Leon Energy is expected to under-perform the Inpex Corp. In addition to that, San Leon is 1.05 times more volatile than Inpex Corp ADR. It trades about -0.02 of its total potential returns per unit of risk. Inpex Corp ADR is currently generating about 0.04 per unit of volatility. If you would invest 979.00 in Inpex Corp ADR on August 30, 2024 and sell it today you would earn a total of 298.00 from holding Inpex Corp ADR or generate 30.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
San Leon Energy vs. Inpex Corp ADR
Performance |
| Timeline |
| San Leon Energy |
| Inpex Corp ADR |
San Leon and Inpex Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with San Leon and Inpex Corp
The main advantage of trading using opposite San Leon and Inpex Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if San Leon position performs unexpectedly, Inpex Corp 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 Inpex Corp will offset losses from the drop in Inpex Corp's long position.| San Leon vs. Permian Resources | San Leon vs. Devon Energy | San Leon vs. EOG Resources | San Leon vs. Coterra Energy |
| Inpex Corp vs. Permian Resources | Inpex Corp vs. Devon Energy | Inpex Corp vs. EOG Resources | Inpex Corp vs. Coterra Energy |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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