Correlation Between Spartan Delta and Saturn Oil

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

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

Diversification Opportunities for Spartan Delta and Saturn Oil

0.76

Correlation Coefficient

Spartan Delta  Saturn Oil

Poor diversification

The 3 months correlation between Spartan and Saturn is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Spartan Delta Corp and Saturn Oil Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saturn Oil Gas and Spartan Delta 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 Spartan Delta Corp are associated (or correlated) with Saturn Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saturn Oil Gas has no effect on the direction of Spartan Delta i.e., Spartan Delta and Saturn Oil go up and down completely randomly.

Pair Corralation between Spartan Delta and Saturn Oil

Assuming the 90 days horizon Spartan Delta Corp is expected to generate 1.05 times more return on investment than Saturn Oil. However, Spartan Delta is 1.05 times more volatile than Saturn Oil Gas. It trades about 0.56 of its potential returns per unit of risk. Saturn Oil Gas is currently generating about 0.22 per unit of risk. If you would invest  209.00  in Spartan Delta Corp on October 20, 2024 and sell it today you would earn a total of  71.00  from holding Spartan Delta Corp or generate 33.97% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Spartan Delta Corp  vs.  Saturn Oil Gas

Spartan Delta Corp

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Spartan Delta Corp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Spartan Delta reported solid returns over the last few months and may actually be approaching a breakup point.

Saturn Oil Gas

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Saturn Oil Gas has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Spartan Delta and Saturn Oil

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

The idea behind Spartan Delta Corp and Saturn Oil Gas 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.