Correlation Between Cheetah Oil and Strat Petroleum

Can any of the company-specific risk be diversified away by investing in both Cheetah Oil and Strat Petroleum 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 Cheetah Oil and Strat Petroleum into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cheetah Oil Gas and Strat Petroleum, you can compare the effects of market volatilities on Cheetah Oil and Strat Petroleum 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 Cheetah Oil with a short position of Strat Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cheetah Oil and Strat Petroleum.

Diversification Opportunities for Cheetah Oil and Strat Petroleum

0.0

Correlation Coefficient

Cheetah Oil  Strat Petroleum

Pay attention - limited upside

The 3 months correlation between Cheetah and Strat is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Cheetah Oil Gas and Strat Petroleum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strat Petroleum and Cheetah Oil 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 Cheetah Oil Gas are associated (or correlated) with Strat Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strat Petroleum has no effect on the direction of Cheetah Oil i.e., Cheetah Oil and Strat Petroleum go up and down completely randomly.

Pair Corralation between Cheetah Oil and Strat Petroleum

If you would invest  0.01  in Cheetah Oil Gas on October 22, 2024 and sell it today you would earn a total of  0.01  from holding Cheetah Oil Gas or generate 100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	96.77%
Values	Daily Returns

Cheetah Oil Gas  vs.  Strat Petroleum

Cheetah Oil Gas

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Cheetah Oil Gas are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical indicators, Cheetah Oil reported solid returns over the last few months and may actually be approaching a breakup point.

Strat Petroleum

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Strat Petroleum has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Strat Petroleum is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Cheetah Oil and Strat Petroleum

The main advantage of trading using opposite Cheetah Oil and Strat Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cheetah Oil position performs unexpectedly, Strat Petroleum 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 Strat Petroleum will offset losses from the drop in Strat Petroleum's long position.

The idea behind Cheetah Oil Gas and Strat Petroleum pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.