Correlation Between Star Petroleum and Super Energy
Can any of the company-specific risk be diversified away by investing in both Star Petroleum and Super Energy 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 Super Energy 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 Super Energy, you can compare the effects of market volatilities on Star Petroleum and Super Energy 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 Super Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Star Petroleum and Super Energy.
Diversification Opportunities for Star Petroleum and Super Energy
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Star and Super is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Star Petroleum Refining and Super Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Super Energy 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 Super Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Super Energy has no effect on the direction of Star Petroleum i.e., Star Petroleum and Super Energy go up and down completely randomly.
Pair Corralation between Star Petroleum and Super Energy
Assuming the 90 days trading horizon Star Petroleum Refining is expected to generate 1.0 times more return on investment than Super Energy. However, Star Petroleum Refining is 1.0 times less risky than Super Energy. It trades about 0.1 of its potential returns per unit of risk. Super Energy is currently generating about -0.06 per unit of risk. If you would invest 655.00 in Star Petroleum Refining on September 4, 2024 and sell it today you would earn a total of 30.00 from holding Star Petroleum Refining or generate 4.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Star Petroleum Refining vs. Super Energy
Performance |
| Timeline |
| Star Petroleum Refining |
| Super Energy |
Star Petroleum and Super Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Star Petroleum and Super Energy
The main advantage of trading using opposite Star Petroleum and Super Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Star Petroleum position performs unexpectedly, Super Energy 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 Super Energy will offset losses from the drop in Super Energy'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 |
| Super Energy vs. Bangchak Public | Super Energy vs. Gulf Energy Development | Super Energy vs. Bangkok Expressway and | Super Energy vs. BGrimm Power Public |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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