Correlation Between Trio Petroleum and San Juan
Can any of the company-specific risk be diversified away by investing in both Trio Petroleum and San Juan 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 Trio Petroleum and San Juan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Trio Petroleum Corp and San Juan Basin, you can compare the effects of market volatilities on Trio Petroleum and San Juan 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 Trio Petroleum with a short position of San Juan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trio Petroleum and San Juan.
Diversification Opportunities for Trio Petroleum and San Juan
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Trio and San is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Trio Petroleum Corp and San Juan Basin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on San Juan Basin and Trio 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 Trio Petroleum Corp are associated (or correlated) with San Juan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of San Juan Basin has no effect on the direction of Trio Petroleum i.e., Trio Petroleum and San Juan go up and down completely randomly.
Pair Corralation between Trio Petroleum and San Juan
Given the investment horizon of 90 days Trio Petroleum Corp is expected to under-perform the San Juan. In addition to that, Trio Petroleum is 3.15 times more volatile than San Juan Basin. It trades about -0.1 of its total potential returns per unit of risk. San Juan Basin is currently generating about 0.05 per unit of volatility. If you would invest 401.00 in San Juan Basin on September 1, 2024 and sell it today you would earn a total of 46.00 from holding San Juan Basin or generate 11.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Trio Petroleum Corp vs. San Juan Basin
Performance |
| Timeline |
| Trio Petroleum Corp |
| San Juan Basin |
Trio Petroleum and San Juan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Trio Petroleum and San Juan
The main advantage of trading using opposite Trio Petroleum and San Juan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trio Petroleum position performs unexpectedly, San Juan 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 San Juan will offset losses from the drop in San Juan's long position.| Trio Petroleum vs. SkyWest | Trio Petroleum vs. Delta Air Lines | Trio Petroleum vs. Consol Energy | Trio Petroleum vs. Stepan Company |
| San Juan vs. Sabine Royalty Trust | San Juan vs. Permian Basin Royalty | San Juan vs. Cross Timbers Royalty | San Juan vs. Mesa Royalty Trust |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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