Correlation Between Eolus Vind and ShaMaran Petroleum

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

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

Diversification Opportunities for Eolus Vind and ShaMaran Petroleum

-0.21

Correlation Coefficient

Eolus Vind  ShaMaran Petroleum

Very good diversification

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

Pair Corralation between Eolus Vind and ShaMaran Petroleum

Assuming the 90 days trading horizon Eolus Vind AB is expected to generate 1.24 times more return on investment than ShaMaran Petroleum. However, Eolus Vind is 1.24 times more volatile than ShaMaran Petroleum Corp. It trades about 0.14 of its potential returns per unit of risk. ShaMaran Petroleum Corp is currently generating about 0.14 per unit of risk. If you would invest  4,550  in Eolus Vind AB on September 29, 2024 and sell it today you would earn a total of  260.00  from holding Eolus Vind AB or generate 5.71% return on investment over 90 days.

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

Eolus Vind AB  vs.  ShaMaran Petroleum Corp

Eolus Vind AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Eolus Vind AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong essential indicators, Eolus Vind is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

ShaMaran Petroleum Corp

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in ShaMaran Petroleum Corp are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain primary indicators, ShaMaran Petroleum unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Eolus Vind and ShaMaran Petroleum

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

The idea behind Eolus Vind AB and ShaMaran Petroleum Corp 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.