Correlation Between Harbour Energy and Energean Plc

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

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

Diversification Opportunities for Harbour Energy and Energean Plc

-0.17

Correlation Coefficient

Harbour Energy  Energean Plc

Good diversification

The 3 months correlation between Harbour and Energean is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Harbour Energy PLC and Energean plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Energean plc and Harbour Energy 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 Harbour Energy PLC are associated (or correlated) with Energean Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Energean plc has no effect on the direction of Harbour Energy i.e., Harbour Energy and Energean Plc go up and down completely randomly.

Pair Corralation between Harbour Energy and Energean Plc

Assuming the 90 days horizon Harbour Energy PLC is expected to under-perform the Energean Plc. But the pink sheet apears to be less risky and, when comparing its historical volatility, Harbour Energy PLC is 1.5 times less risky than Energean Plc. The pink sheet trades about -0.13 of its potential returns per unit of risk. The Energean plc is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  1,272  in Energean plc on September 29, 2024 and sell it today you would earn a total of  123.00  from holding Energean plc or generate 9.67% return on investment over 90 days.

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

Harbour Energy PLC  vs.  Energean plc

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. In spite of unsteady performance in the last few months, the Stock's forward indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

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.

Pair Trading with Harbour Energy and Energean Plc

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

The idea behind Harbour Energy PLC and Energean 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.