Correlation Between Southern Cross and PetroShale
Can any of the company-specific risk be diversified away by investing in both Southern Cross 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 Southern Cross and PetroShale into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Southern Cross Media and PetroShale, you can compare the effects of market volatilities on Southern Cross 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 Southern Cross with a short position of PetroShale. Check out your portfolio center. Please also check ongoing floating volatility patterns of Southern Cross and PetroShale.
Diversification Opportunities for Southern Cross and PetroShale
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Southern and PetroShale is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Southern Cross Media and PetroShale in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PetroShale and Southern Cross 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 Southern Cross Media 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 Southern Cross i.e., Southern Cross and PetroShale go up and down completely randomly.
Pair Corralation between Southern Cross and PetroShale
Assuming the 90 days horizon Southern Cross Media is expected to generate 2.77 times more return on investment than PetroShale. However, Southern Cross is 2.77 times more volatile than PetroShale. It trades about 0.18 of its potential returns per unit of risk. PetroShale is currently generating about 0.13 per unit of risk. If you would invest 9.73 in Southern Cross Media on November 3, 2024 and sell it today you would earn a total of 1.27 from holding Southern Cross Media or generate 13.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Southern Cross Media vs. PetroShale
Performance |
| Timeline |
| Southern Cross Media |
| PetroShale |
Southern Cross and PetroShale Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Southern Cross and PetroShale
The main advantage of trading using opposite Southern Cross and PetroShale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Southern Cross 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.| Southern Cross vs. Pieridae Energy Limited | Southern Cross vs. Prospera Energy | Southern Cross vs. Ngx Energy International | Southern Cross vs. Barrister Energy LLC |
| 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data |