Correlation Between Energean Plc and Harbour Energy

Can any of the company-specific risk be diversified away by investing in both Energean Plc and Harbour 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 Energean Plc and Harbour Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Energean plc and Harbour Energy plc, you can compare the effects of market volatilities on Energean Plc and Harbour 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 Energean Plc with a short position of Harbour Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Energean Plc and Harbour Energy.

Diversification Opportunities for Energean Plc and Harbour Energy

-0.21

Correlation Coefficient

Energean Plc  Harbour Energy

Very good diversification

The 3 months correlation between Energean and Harbour is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Energean plc and Harbour Energy plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harbour Energy plc and Energean Plc 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 Energean plc are associated (or correlated) with Harbour Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harbour Energy plc has no effect on the direction of Energean Plc i.e., Energean Plc and Harbour Energy go up and down completely randomly.

Pair Corralation between Energean Plc and Harbour Energy

Assuming the 90 days horizon Energean Plc is expected to generate 1.01 times less return on investment than Harbour Energy. But when comparing it to its historical volatility, Energean plc is 1.34 times less risky than Harbour Energy. It trades about 0.04 of its potential returns per unit of risk. Harbour Energy plc is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  299.00  in Harbour Energy plc on September 30, 2024 and sell it today you would earn a total of  31.00  from holding Harbour Energy plc or generate 10.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	58.98%
Values	Daily Returns

Energean plc  vs.  Harbour Energy plc

Energean plc

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Energean plc are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Energean Plc may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Harbour Energy plc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Harbour Energy plc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's forward 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 Energean Plc and Harbour Energy

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

The idea behind Energean plc and Harbour Energy plc 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.