Correlation Between Star Petroleum and Energy Absolute
Can any of the company-specific risk be diversified away by investing in both Star Petroleum and Energy Absolute 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 Star Petroleum and Energy Absolute into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Star Petroleum Refining and Energy Absolute Public, you can compare the effects of market volatilities on Star Petroleum and Energy Absolute 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 Star Petroleum with a short position of Energy Absolute. Check out your portfolio center. Please also check ongoing floating volatility patterns of Star Petroleum and Energy Absolute.
Diversification Opportunities for Star Petroleum and Energy Absolute
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Star and Energy is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Star Petroleum Refining and Energy Absolute Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Energy Absolute Public and Star Petroleum 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 Star Petroleum Refining are associated (or correlated) with Energy Absolute. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Energy Absolute Public has no effect on the direction of Star Petroleum i.e., Star Petroleum and Energy Absolute go up and down completely randomly.
Pair Corralation between Star Petroleum and Energy Absolute
Assuming the 90 days trading horizon Star Petroleum Refining is expected to generate 0.69 times more return on investment than Energy Absolute. However, Star Petroleum Refining is 1.45 times less risky than Energy Absolute. It trades about 0.01 of its potential returns per unit of risk. Energy Absolute Public is currently generating about -0.39 per unit of risk. If you would invest 670.00 in Star Petroleum Refining on August 25, 2024 and sell it today you would earn a total of 0.00 from holding Star Petroleum Refining or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Star Petroleum Refining vs. Energy Absolute Public
Performance |
| Timeline |
| Star Petroleum Refining |
| Energy Absolute Public |
Star Petroleum and Energy Absolute Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Star Petroleum and Energy Absolute
The main advantage of trading using opposite Star Petroleum and Energy Absolute positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Star Petroleum position performs unexpectedly, Energy Absolute 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 Energy Absolute will offset losses from the drop in Energy Absolute's long position.| Star Petroleum vs. Thai Oil Public | Star Petroleum vs. IRPC Public | Star Petroleum vs. PTT Global Chemical | Star Petroleum vs. PTT Exploration and |
| Energy Absolute vs. PTT Oil and | Energy Absolute vs. Power Solution Technologies | Energy Absolute vs. Star Petroleum Refining |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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