Correlation Between New Frontier and Saturn Oil

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

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

Diversification Opportunities for New Frontier and Saturn Oil

0.0

Correlation Coefficient

New Frontier  Saturn Oil

Pay attention - limited upside

The 3 months correlation between New and Saturn is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding New Frontier Energy 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 New Frontier 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 New Frontier Energy 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 New Frontier i.e., New Frontier and Saturn Oil go up and down completely randomly.

Pair Corralation between New Frontier and Saturn Oil

Given the investment horizon of 90 days New Frontier Energy is expected to under-perform the Saturn Oil. In addition to that, New Frontier is 2.76 times more volatile than Saturn Oil Gas. It trades about -0.05 of its total potential returns per unit of risk. Saturn Oil Gas is currently generating about 0.0 per unit of volatility. If you would invest  177.00  in Saturn Oil Gas on October 26, 2024 and sell it today you would lose (26.00) from holding Saturn Oil Gas or give up 14.69% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.4%
Values	Daily Returns

New Frontier Energy  vs.  Saturn Oil Gas

New Frontier Energy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days New Frontier Energy has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical and fundamental indicators, New Frontier is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

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 nearly stable basic indicators, Saturn Oil is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with New Frontier and Saturn Oil

The main advantage of trading using opposite New Frontier and Saturn Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Frontier 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 New Frontier Energy 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.