Correlation Between Valeura Energy and Sintana Energy
Can any of the company-specific risk be diversified away by investing in both Valeura 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 Valeura 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 Valeura Energy and Sintana Energy, you can compare the effects of market volatilities on Valeura 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 Valeura Energy with a short position of Sintana Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valeura Energy and Sintana Energy.
Diversification Opportunities for Valeura Energy and Sintana Energy
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Valeura and Sintana is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Valeura Energy and Sintana Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sintana Energy and Valeura 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 Valeura Energy 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 Valeura Energy i.e., Valeura Energy and Sintana Energy go up and down completely randomly.
Pair Corralation between Valeura Energy and Sintana Energy
Assuming the 90 days horizon Valeura Energy is expected to generate 0.74 times more return on investment than Sintana Energy. However, Valeura Energy is 1.35 times less risky than Sintana Energy. It trades about -0.03 of its potential returns per unit of risk. Sintana Energy is currently generating about -0.47 per unit of risk. If you would invest 498.00 in Valeura Energy on November 3, 2024 and sell it today you would lose (14.00) from holding Valeura Energy or give up 2.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Valeura Energy vs. Sintana Energy
Performance |
| Timeline |
| Valeura Energy |
| Sintana Energy |
Valeura Energy and Sintana Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Valeura Energy and Sintana Energy
The main advantage of trading using opposite Valeura Energy and Sintana Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valeura 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.| Valeura Energy vs. Bowhead Specialty Holdings | Valeura Energy vs. 51Talk Online Education | Valeura Energy vs. National CineMedia | Valeura Energy vs. Old Republic International |
| 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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