Correlation Between US Energy and Sintana Energy
Can any of the company-specific risk be diversified away by investing in both US Energy and Sintana 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 US Energy and Sintana Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between US Energy Corp and Sintana Energy, you can compare the effects of market volatilities on US Energy and Sintana 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 US Energy with a short position of Sintana Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of US Energy and Sintana Energy.
Diversification Opportunities for US Energy and Sintana Energy
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between USEG and Sintana is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding US Energy Corp and Sintana Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sintana Energy and US Energy 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 US Energy Corp are associated (or correlated) with Sintana Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sintana Energy has no effect on the direction of US Energy i.e., US Energy and Sintana Energy go up and down completely randomly.
Pair Corralation between US Energy and Sintana Energy
Given the investment horizon of 90 days US Energy Corp is expected to generate 4.26 times more return on investment than Sintana Energy. However, US Energy is 4.26 times more volatile than Sintana Energy. It trades about 0.15 of its potential returns per unit of risk. Sintana Energy is currently generating about -0.47 per unit of risk. If you would invest 161.00 in US Energy Corp on November 3, 2024 and sell it today you would earn a total of 58.00 from holding US Energy Corp or generate 36.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
US Energy Corp vs. Sintana Energy
Performance |
| Timeline |
| US Energy Corp |
| Sintana Energy |
US Energy and Sintana Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with US Energy and Sintana Energy
The main advantage of trading using opposite US Energy and Sintana Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if US Energy position performs unexpectedly, Sintana 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 Sintana Energy will offset losses from the drop in Sintana Energy's long position.| US Energy vs. PEDEVCO Corp | US Energy vs. Houston American Energy | US Energy vs. PHX Minerals | US Energy vs. Trio Petroleum Corp |
| Sintana Energy vs. Kiwetinohk Energy Corp | Sintana Energy vs. Melbana Energy Limited | Sintana Energy vs. Pancontinental Oil Gas | Sintana Energy vs. Eco Oil Gas |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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