Correlation Between Century Petroleum and San Leon

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

By analyzing existing cross correlation between Century Petroleum Corp and San Leon Energy, you can compare the effects of market volatilities on Century Petroleum and San Leon 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 Century Petroleum with a short position of San Leon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Century Petroleum and San Leon.

Diversification Opportunities for Century Petroleum and San Leon

0.0

Correlation Coefficient

Century Petroleum  San Leon

Pay attention - limited upside

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

Pair Corralation between Century Petroleum and San Leon

If you would invest  0.00  in Century Petroleum Corp on October 5, 2024 and sell it today you would earn a total of  0.00  from holding Century Petroleum Corp or generate 9.223372036854776E16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

Century Petroleum Corp  vs.  San Leon Energy

Century Petroleum Corp

Risk-Adjusted Performance

10 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Century Petroleum Corp are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, Century Petroleum exhibited solid returns over the last few months and may actually be approaching a breakup point.

San Leon Energy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days San Leon Energy has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, San Leon is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Century Petroleum and San Leon

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

The idea behind Century Petroleum Corp and San Leon Energy 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.