Correlation Between San Leon and PetroShale
Can any of the company-specific risk be diversified away by investing in both San Leon and PetroShale 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 PetroShale 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 PetroShale, you can compare the effects of market volatilities on San Leon and PetroShale 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 PetroShale. Check out your portfolio center. Please also check ongoing floating volatility patterns of San Leon and PetroShale.
Diversification Opportunities for San Leon and PetroShale
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between San and PetroShale is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding San Leon Energy and PetroShale in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PetroShale 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 PetroShale. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PetroShale has no effect on the direction of San Leon i.e., San Leon and PetroShale go up and down completely randomly.
Pair Corralation between San Leon and PetroShale
Assuming the 90 days horizon San Leon Energy is expected to under-perform the PetroShale. But the otc stock apears to be less risky and, when comparing its historical volatility, San Leon Energy is 1.4 times less risky than PetroShale. The otc stock trades about -0.02 of its potential returns per unit of risk. The PetroShale is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 40.00 in PetroShale on August 28, 2024 and sell it today you would lose (11.00) from holding PetroShale or give up 27.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
San Leon Energy vs. PetroShale
Performance |
| Timeline |
| San Leon Energy |
| PetroShale |
San Leon and PetroShale Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with San Leon and PetroShale
The main advantage of trading using opposite San Leon and PetroShale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if San Leon position performs unexpectedly, PetroShale 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 PetroShale will offset losses from the drop in PetroShale's long position.| San Leon vs. Permian Resources | San Leon vs. Devon Energy | San Leon vs. EOG Resources | San Leon vs. Coterra Energy |
| PetroShale vs. Dno ASA | PetroShale vs. Horizon Oil Limited | PetroShale vs. Enwell Energy plc | PetroShale vs. Tullow Oil plc |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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